Update #2: On August 2, 2013, a special committee announced that Michael Dell and his partner, the investor firm Silver Lake, amended their buyout agreement in a move that some anticipate will please shareholders enough to ensure Dell can take his computer company private. The fight continues, but not without some savvy business thrusts and parries. 

Michael Dell has faced down his Kobayashi Maru moment. For those who don’t speak geek, Kobayashi Maru was the “no-win scenario” from Star Trek that was supposed to teach aspiring starship captains how to make decisions when all the options they must choose from are bad.

In his bid to take his computer company private, last month Michael Dell found himself without the votes to ensure he succeeded, a board committee that was demanding he raise his bid, and a hostile shareholder threatening his own takeover that would have left Austin’s billionaire boy wonder on the street.

Even this week, activist investor Carl Icahn was filing suit in Delaware court trying to block Michael Dell’s latest moves. Were Icahn to succeed, he would likely split the board but lack the votes to oust Michael Dell, leaving a bitterly divided company that would be in far worse shape than it now. 

Last night, Michael Dell took a page from Star Trek lore and rewrote the rules, just as Captain Kirk did to pass the Kobayashi Maru test. Dell convinced the board to change the way it counted votes from shareholders. Under the original deal, shareholders who didn’t vote would be added to the “no” column. Michael Dell had urged the board to count those abstentions as “yes” votes. Instead, the board decided it simply wouldn’t count them at all.

In exchange, Michael Dell sweetened his deal from his last offer of $13.75 a share to the equivalent of $13.88, bringing the value of the buyout to $28.8 billion. The move essentially clinches the deal for Dell, although this isn’t Icahn’s first rodeo. He may have a few more tricks up his sleeve before shareholders finally get to vote at a thrice-rescheduled meeting that is now set for September 12. In a regulatory filing, Icahn vowed to keep fighting, saying that although Michael Dell had raised his bid, the offer was still "an insult to shareholders." Icahn also said the board's decision to change the voting rules amounted to it "improperly putting its thumb on the scales in favor of Mr. Dell's offer."

The Dell deal shows how pliable shareholder rights are. There are no regulatory requirements or laws that state how shareholder votes must be counted. Companies can, and do, change the rules to suit their needs. Early on, Dell’s board had decided that Michael Dell’s 15.7 percent stake in the company wouldn’t be included in the vote. Given its latest decision on abstentions, the deal may not even need support from a majority of shareholders to succeed.

Going private is Dell’s best option for survival. Getting there has sparked one of the messier corporate buyout battles in history. During Dell’s heyday in the nineties, many investors learned the hard way the folly of betting against Michael Dell. Just a few days ago, it appeared he was facing a no-win scenario. Already a geek icon in his own right, he instead extricated himself just as Captain Kirk once did.

When asked why he cheated on the Kobayashi Maru test, Kirk said: “I don’t like to lose.” Neither, it seems, does Michael Dell.  

Update #1: This article, featured in our August 2013 issue, went to press one week prior to the postponement of the shareholder's meeting, which was set to take place on Thursday July 18. The following is Loren Steffy's response to the news:

Before Dell can move beyond the PC, it has to move beyond its buyout battle. That’s proving more difficult than Michael Dell has anticipated when he first began talks last year to take the computer-maker private.

Dell shareholders were set to vote on his $24.4 billion plan at the company’s Round Rock headquarters Thursday morning. Instead, the company postponed the meeting until July 24, a sign that Michael Dell may not have the support he needs for his deal.

The buyout required votes from 42 percent of Dell’s shareholders excluding Michael himself, who owns about 16 percent of the company. But in recent weeks, his $13.65-a-share offer was trumped by an offer from activist investor Carl Icahn and Dell’s biggest institutional holder, Southeastern Asset Management.

Icahn, who holds just under 9 percent of Dell’s stock, made a bid for $14, although if Icahn is running true to form, he’s less interested in actually buying the company than in forcing Michael Dell to sweeten his deal.

So far, Michael has refused, and it appeared he had prevailed after two key proxy advisory firms, Glass Lewis & Co. and Institutional Shareholder Services, both advised big investors to support the buyout. As the vote came down to the wire, though, institutions that hold more than 20 percent of Dell’s shares said they were opposed, and the jockeying for the remaining votes continued into the wee hours ahead of Thursday’s vote deadline.

Presumably, some of those investors were holding out to see what Michael Dell would do. By pushing the vote back, he gets another week to twist their arms.

Michael Dell is still likely to prevail. It’s rare for management-led deals to fail, especially when ISS and Glass Lewis endorse them. Icahn’s offer has always seemed a bit iffy, his financing has been questioned, his strategy is unclear and his offer price has fluctuated. But big investors also know that Icahn’s track record. His tactics tend to work. Don’t be surprised if Michael Dell cough up more cash to get his deal done. 

Original article: In the nineties, at Dell’s Austin manufacturing plant, employees assembled personal computers with crisp efficiency. Every few minutes, an order came down the line and color-coded lights on the appropriate bins switched on, telling the workers which components to