December 6, 2024

Early Exit for Ballmer Amid Course Change at Microsoft

Mr. Ballmer, who joined Microsoft in 1980, will be departing a company that is very different from the fearsome software giant of the 1990s. During his tenure as chief, the company has failed to capitalize on some of the most important tectonic shifts in technology, including the rise of mobile devices and Internet search.

Mr. Ballmer also watched as Apple, an old nemesis that nearly went bankrupt in the late 1990s, and Google, which didn’t even exist until then, have soared.

As chief executive, he has faced regular calls for his ouster from investors and analysts in recent years because of the company’s missteps, and in fact Microsoft’s stock — which has languished for most of his tenure — rose 6 percent on the news Friday.

But Microsoft said the decision to leave the company was entirely Mr. Ballmer’s.

“There is never a perfect time for this type of transition, but now is the right time,” Mr. Ballmer said in a statement.

Mr. Ballmer, 57, will stay on until a successor is chosen by a special committee of the board that includes John W. Thompson, the board’s lead independent director, and Mr. Gates, Microsoft’s chairman. The committee will consider both internal and external candidates and has hired an executive search firm to scout for a replacement.

Earlier this year, Microsoft announced a major restructuring aimed at making the company more nimble and less prone to infighting. Mr. Ballmer has said the shake-up will help remake Microsoft into a “devices and services” company, one that pays greater mind to blending its software with hardware — and, in some cases, makes devices itself.

Mr. Ballmer said that he was leaving earlier than planned because he believed the company needed an executive who would remain well beyond that transition.

“My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company,” Mr. Ballmer said. “We need a C.E.O. who will be here longer term for this new direction.”

The fact that Mr. Ballmer announced his plans without a successor in place was puzzling to many observers in the technology industry.

The disappointing stock performance may have been a factor. This year, a hedge fund called ValueAct, known for behind-the-scenes shareholder activism, began acquiring a small stake in Microsoft. Some analysts say they believe other shareholders might have been willing to join with the fund in efforts to lobby for management changes at the company.

Some analysts speculated on Friday that Mr. Ballmer announced his retirement early to buy time to find a successor without the distraction of a fight with shareholders.

Microsoft’s financial performance in the coming quarters could also have amplified calls for a leadership change at Microsoft.

The company posted disappointing results in its most recent quarter as its venerable Windows business showed signs of succumbing to a broader slump in personal computer sales. Microsoft also disclosed an embarrassing $900 million charge to cover its unsold inventory of Surface tablets, the company’s answer to the iPad.

Most forecasters are predicting that P.C. sales will continue to decline for the foreseeable future as consumers opt instead to buy tablet computers and smartphones.

Article source: http://www.nytimes.com/2013/08/24/technology/ballmer-announces-retirement-from-microsoft.html?partner=rss&emc=rss

DealBook: Dell Reaches a Deal With Icahn

Carl C. Icahn, the activist investor.Chip East/ReutersCarl C. Icahn

A special committee of Dell’s board has reached an agreement with Carl C. Icahn that limits his ownership stake in the company while allowing him to contact other shareholders about a possible bid for the computer maker.

Under the deal announced on Tuesday, Mr. Icahn has agreed not to acquire more than 10 percent of Dell’s shares or enter into agreements with shareholders who collectively own more than 15 percent of the shares. In return, the company has given him a limited waiver under Delaware corporate law that enables him to engage with other Dell shareholders.

“The special committee believes that granting the limited waiver to Mr. Icahn while capping his share ownership will maximize the chances of eliciting a superior proposal from Mr. Icahn while at the same time protecting shareholders against potential accumulation of an unduly influential voting interest,” the Dell committee said in a statement.

Mr. Icahn and the private equity firm Blackstone Group were the two preliminary bidders to emerge last month from the special committee’s process of soliciting potential alternatives to the proposed $13.65-a-share offer from the company’s founder, Michael S. Dell, and the private equity firm Silver Lake.

Blackstone and Mr. Icahn have been inspecting Dell’s books before deciding whether to make final competing bids to the $24.4 billion buyout.

Mr. Icahn has previously outlined an offer of $15 a share for about 58 percent of the company. Under that plan, he would have a 24.1 percent stake in Dell.

Blackstone, which is working with the investment firms Francisco Partners and Insight Venture Partners, has proposed offering more than $14.25 a share for control of Dell, but not for the whole company.

Article source: http://dealbook.nytimes.com/2013/04/16/dell-strikes-deal-with-icahn/?partner=rss&emc=rss

DealBook: 2 Rivals Complicate Deal for Dell

Two rival bids for Dell Inc. have emerged, threatening to complicate or change — or upend — an effort to take the embattled computer maker private in a $24 billion deal under the leadership of Michael S. Dell.

The private equity giant Blackstone Group and the investor Carl C. Icahn have each separately submitted preliminary takeover proposals before a deadline set by a special committee of Dell’s board intended to drum up other offers, people who had been briefed on the matter but were not authorized to speak publicly said.

Both proposals are valued at more than the offer of $13.65 a share by Mr. Dell and his private equity partner, Silver Lake.

The Dell committee may announce Monday whether it believes either bid is likely to lead to a superior offer, one of the people briefed on the matter said.

But much work remains for Dell’s special committee and the two new bidders. Both of the new proposals are highly preliminary, meant to keep talks going after the 45-day so-called go-shop period.

Neither proposal has firm financing lined up, instead relying on “highly confident” letters from their banks that they can raise the money. Blackstone and its group are working with Morgan Stanley, while Mr. Icahn, who has also built a substantial stake in Dell, is using the Jefferies Group. That means that a final bid from either suitor is weeks away. And Dell’s special committee must also determine whether any such proposal would be superior to the all-cash offer by Mr. Dell and Silver Lake.

Nonetheless, the emergence of two competing bids is a surprising setback to the buyout effort. Few would have predicted Dell, a struggling personal computer maker, would have attracted so much interest when Mr. Dell and Silver Lake announced their takeover offer early last month. Analysts and investors had widely believed that Mr. Dell, who founded the company that bears his name nearly 29 years ago in his college dormitory, would prevail.

At the least, the preliminary bids may lead to a higher offer for Dell shareholders, some of whom have vocally opposed the current bid as undervaluing the company.

Strictly speaking, neither Blackstone nor Mr. Icahn would take Dell completely private, unlike the bid by Mr. Dell and Silver Lake. Both envision leaving part of the company public through what is known as a stub, which would allow current shareholders to keep a stake.

Blackstone proposed paying more than $14.25 a share, working with two technology-focused investment firms, Francisco Partners and Insight Venture Partners. While the private equity firm did not specify what percentage of Dell would remain public, it proposed letting shareholders sell their entire holdings if so desired. Blackstone has also weighed selling part of Dell’s business, like its financial arm, to help pay for any deal.

Mr. Icahn outlined a plan to pay $15 a share for about 58 percent of the company, meaning that other investors would be allowed to sell only part of their stakes.

Should the special Dell committee choose an offer from either suitor, Mr. Dell and Silver Lake would have just one chance to match or top that bid.

The appearance of Blackstone as a potential spoiler is one of the few times that a private equity firm has “jumped” another’s deal. Blackstone and others in the private equity industry are fighting off an antitrust lawsuit in the Federal District Court in Boston that cites this apparent industry custom as evidence of collusion.

The appearance of Blackstone and Mr. Icahn was also one of the rare instances when a go-shop period actually attracted another suitor. By one deal maker’s reckoning, fewer than 20 percent of these efforts for a deal worth more than $1 billion have found an alternative offer.

Letting some shareholders remain invested in Dell could go a long way toward appeasing one of the most vocal critics of the current deal: Southeastern Asset Management, the company’s biggest outside investor, with a stake of about 8.4 percent. Southeastern has declared publicly that it will not accept Mr. Dell’s offer, and floated the idea of a public stub.

Blackstone has spoken with Southeastern, people briefed on the matter said.

Mr. Icahn, who disclosed in a letter last Friday to the Dell special committee that he owns 80 million shares, or less than 5 percent of the company, had previously told the committee that he opposed Mr. Dell’s current bid. Neither Mr. Icahn nor Blackstone offered specifics about how they would run Dell after the deal is completed. While Mr. Dell has committed to negotiating with any party that the special board committee deems likely to produce a superior proposal, he is free to leave his post as chief executive.

Blackstone has approached possible replacements for Mr. Dell. But at least one of them, Oracle’s president, Mark V. Hurd, has expressed little interest.

Blackstone and Mr. Icahn could also have difficulty financing their offers. Mr. Dell and Silver Lake have lined up five major lenders to support their bid. It is not clear whether any banks would support a higher-priced offer that would lay more debt onto a company whose business is widely seen as deteriorating.

Another factor the special Dell committee must weigh is the cost of leaving some Dell shares publicly traded on the Nasdaq stock market. Underlying the premise of Mr. Dell’s bid is his contention that the changes needed to fix the company would upset public shareholders, further hurting its stock price.

Andrew Ross Sorkin contributed reporting.

Article source: http://dealbook.nytimes.com/2013/03/24/2-rivals-complicate-deal-for-dell/?partner=rss&emc=rss

DealBook: Icahn Signs Confidentiality Agreement With Dell

Carl Icahn has suggested a so-called leveraged recapitalization of Dell.Chad Batka for The New York TimesCarl Icahn has suggested a so-called leveraged recapitalization of Dell.

The billionaire investor Carl C. Icahn said on Monday that he had signed a confidentiality agreement with Dell Inc., potentially heading off a confrontation over the computer company’s $24.4 billion sale.

In a brief statement, Mr. Icahn’s firm said that it “looks forward to commencing its review of Dell’s confidential information.”

The signing of the confidentiality agreement may keep Mr. Icahn from speaking out against Dell’s planned sale to its founder, Michael S. Dell, and the investment firm Silver Lake. Mr. Icahn had threatened to publicly challenge the deal in a letter to the computer maker’s board, indicating that he would call for the company to borrow money and pay out a special dividend.

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Over days of negotiations last week, advisers to a special committee of Dell’s board successfully coaxed Mr. Icahn into signing a confidentiality agreement, this person said. The directors had wanted Mr. Icahn to provide a proposal during the so-called go-shop process aimed at drawing higher bids than Mr. Dell’s $13.65-a-share offer.

One option is a preliminary proposal Mr. Icahn had floated early on in talks with the Dell committee, in which he would run a tender offer for some of the company’s shares at a price of $15 each.

He later focused on his demand for a special dividend, a move that the special committee said it had already considered and discarded as inferior to Mr. Dell’s offer.

Dell

Shares of Dell rose 1 percent, to $14.31, in premarket trading on Monday.

It is unclear how big a stake Mr. Icahn has amassed; he has described it only as “substantial.” The confidentiality agreement does not include a standstill agreement that would prevent him from adding to his stake, according to a person briefed on the matter.

“The special committee welcomes Carl Icahn and all other interested parties to participate in the ‘go-shop’ process,” the Dell committee said in a statement. “Our goal is to determine if there are alternative transactions that could be superior to the going-private transaction and to secure the best result for Dell’s public shareholders – whether that is the announced transaction or an alternative.”

Article source: http://dealbook.nytimes.com/2013/03/11/icahn-signs-confidentiality-agreement-with-dell/?partner=rss&emc=rss