The board of Dell has backed its founder's bid for the company in partnership with venture capital firm Silver Lake.
A special committee set up by the company has recommended Michael Dell's bid, rejecting an alternative offer from activist investor Carl Icahn and venture capital firm Southeastern. It made the recommendation in the belief that Michael Dell's deal ultimately offered better financial value for shareholders, among other considerations.
In a statement, Dell's special committee said:
"The board believes the $13.65 [£8.87] per share cash sale to Silver Lake and Michael Dell is the best option for shareholders.
"[There is a] significant liquidity gap in the recapitalisation proposed by Icahn/Southeastern that could reduce the promised $12.00 per share special dividend to $9.35 per share - and to $8.50 per share if Icahn/Southeastern are the only shareholders electing the equity stub instead of cash."
It gave four main reasons for recommending the Dell/Silver Lake offer:
"The Dell board of directors considered a number of important benefits to shareholders in arriving at its strong recommendation in favor of the transaction. The Michael Dell/Silver Lake transaction:
Represents an all-cash offer at a significant and certain premium; Is based on a comprehensive range of alternatives evaluated; Includes shareholder-friendly processes and terms to ensure value is maximised; and, Shifts considerable business performance and transaction risks to the buyer group."
The Michael Dell/Silver Lake bid values the company at about $24.4bn (£15.9bn), a 25 per cent premium over the company's closing share price of $10.88 (£7.10) on 11 January, the day before rumours that Michael Dell had put together a deal for the company were published, forcing the billionaire businessman to make his offer public.
The statement continues: "The Dell board of directors, acting on the recommendation of a special committee of four independent directors, unanimously approved a merger agreement under which Michael Dell and Silver Lake Partners will acquire Dell and take the company private."
The special committee was established in August 2012 after Michael Dell had informed the board of the company that he was interested in taking the company private.
