Dell Getting Shareholder Resistance to Buyout Deal
Some investors, including the company's largest independent shareholder, said the $24.4 billion price tag for Dell is too low.Dell is getting pushback from some investors on the $24.4 billion plan to take the company private, with the company’s largest independent shareholder saying it will vote against the deal. In a filing with the Securities and Exchange Commission (SEC) Feb. 8, officials with Southeastern Management said the $13.65 per share offered to investors—despite being a 25 percent premium over the value of the stock almost a month ago—was far too low for Dell, and that they would not support it. They said Southeastern Management, which holds about 8.5 percent of shares in the world’s third-largest PC maker, would oppose the deal with all the options at its disposal, including a proxy fight. In a letter to Dell’s board of directors, also dated Feb. 8 and included in the SEC document, the investment firm in the filing said it felt “extreme disappointment regarding the proposed go-private transaction, which we believe grossly undervalues the Company. We also write to inform you that we will not vote in favor of the proposed transaction as currently structured.”
After weeks of speculation, Dell announced Feb. 5 that it was partnering with investment firm Silver Lake Partners, Microsoft and others to take the company private in a move analysts said was designed to enable executives to accelerate plans to transform the company from a PC maker into an enterprise IT solutions provider, and to do so without the pressure of having to meet quarterly financial goals.