Feeds

Compellent straps on chastity belt for Dell

Other bidders to stub appendages on iron knickers

Next gen security for virtualised datacentres

Compellent and Dell have cooked up a poison pill shareholder rights deal to discourage any other bidders from coming forward and paying more than Dell.

Dell really does not want to get burned again after the 3PAR bid battle it lost to HP.

This is how the poison will take effect: All Compellent stockholders of record as of 27 December, 2010, will receive rights to purchase shares of a new series of preferred stock. If any person or identifiable group of people other than Dell buy 15 per cent or more of Compellent stock, or announce a tender offer for that amount of stock, then "each Right will entitle the holder to purchase from Compellent one one-hundredth of a share of preferred stock."

In more detail, each stockholder, but not the acquiring entity, "would be entitled to purchase, at the exercise price of the Right, such number of shares of Compellent common stock having a current value of twice the exercise price of the Right." Until the new acquirer has 50 per cent or more of Compellent's common stock, Compellent's board can "exchange the Rights, in part or in whole, for Compellent common stock. "

Here's the kicker:

"If Compellent is acquired in a merger or other business combination transaction, other than by Dell Inc or one of its affiliates, each holder of a Right (other than the Acquiring Person) would then be entitled to purchase, at the exercise price of the Right, such number of shares of the acquiring company's common stock having a current value of twice the exercise price of the Right."

This would make any bid by an alternative bidder to Dell much, much more expensive.

This poison pill has a one-year life span, as: "The Rights will expire on 27 December, 2011."

The mere setting up of this complicated scheme implies that there could be other potential bidders circling around Compellent.

Law firms are already on the case, with a few trying to set up class action suits asserting that Compellent's directors are under-selling the company. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.