Business

Sources: Dell board likely to reject new takeover offer

Dell’s board is likely to reject an offer from Michael Dell and Silver Lake that would have them raise their takeover bid in exchange for changing the voting rules, The Post has learned.

The same day shareholders were scheduled to vote on the deal, the Dell founder raised his offer for the struggling PC maker by 10 cents, to $13.75 a share, saying it was his best and final offer.

But the higher offer comes with conditions. The buyout group wants the board to change a rule that counts abstentions as “no” votes.

A special board committee said it is evaluating the proposal and postponed the shareholder vote for a second time until Aug. 2.

The small price bump — less than 1 percent — probably isn’t enough to get the deal done and win over shareholders, sources said. The board was looking for an offer closer to $14 a share.

But the biggest issue for the board is that a change to the voting rules will have a tough time surviving a court challenge as it raises questions about the fairness of the deal, according to Boston College law professor Brian Quinn.

“That would get Judge Strine a little bit concerned,” Quinn said, referring to the Delaware judge who last month rejected a motion for a quick trial to challenge the deal. “Strine will say now you have to prove to me this deal is fair.”

To win court approval, the board would have to argue that changing the rules was worth the bump in price.

Before the first vote was postponed last Thursday, a preliminary tally showed Michael Dell had won a majority of shares voted — 39 percent versus 37 percent, sources said. However, those shares not voted, or 22 percent, were counted as no votes, dooming his proposal.

jkosman@nypost.com