Dell Stake Holder Southeastern Opposes Michael Dell's Bid
By Prasanth Aby Thomas | February 9, 2013 5:42 PM EST
Southeastern Asset Management, which holds 8.5 percent share in the company claimed that Dell's proposal of $24.4bn (£15.5bn) "grossly undervalues the company".
In a letter addressed to Dell's directors' board, Southeastern expressed disappointment with the proposed deal and warned of voting against it. Analysts had earlier warned that the offer of $13.65 a share from Dell and Silver Lake Partners may be perceived too less by stake holders.
Southeastern said that the company's shares are worth $23.72, $10 more than the current offer, adding that it may consider proxy fight and litigation to contest the current plan. This could put Dell and his team under further pressure to come up with a better proposal.
"We will not vote in favour of the proposed transaction as currently structured. We retain and intend to avail ourselves of all options at our disposal to oppose the proposed transaction," the letter to the board read.
Many stake owners had bought into Dell at higher prices, before the firm's share value dwindled. Analysts suggest that Southeastern could have paid as much as $20 per shares on an average, which would mean a sharp loss of over $800m if the current deal goes ahead.
However, Dell's bid values the stocks at a price that has not been reached in months.
In a statement, the company said that the board had considered various options with help from advisors before taking the decision.
"Based on that work, the board concluded that the proposed all-cash transaction is in the best interests of stockholders," said David Frink, a company spokesman.
"The transaction offers an attractive and immediate premium for stockholders and shifts the risks facing the business to the buyer group."
Dell, who launched the firm while he was at the university, currently holds 14 percent stake. The Nasdaq-listed company has had a difficult run in the recent times, mainly due to competition from cheaper Asian rivals and mobile computing boom. He now plans to buy out the rest of the stake holders to take the company private, moving it away from Wall Street pressures.
Under the deal terms, majority of share-owners other than Dell should agree to the buyout. It is not clear how many other stake owners remain opposed to the current deal.
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
Most Popular Slideshows
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- National Ice Cream Day: Most-Ordered Flavors and Toppings by Americans [See Photos]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
- Celebs: Struggle With Drug Addiction
Join the Conversation
- Malaysian Airlines Flight 17: Air Carrier to Give $5,000 Assistance to Victims’ Families; Bankruptcy Looms as 2 Air Mishaps Would Cost Firm Minimum $80.55 M Compensation
- KFC & McDonald’s Accused of Serving ‘Expired’ Meat to Customers
- Foxconn And Pegatron Corp Readies For Apple's iPhone 6 Mass Production This Month
- Malaysian Airlines Ukraine Tragedy Hits Asian Stock Markets
- Parliament Passes Changes to Qantas Sale Act, Flag Carrier Will Remain Majority Australian Owned
- Fresh Leak Hints iPhone 6 Price and Release Date; 4.7-Inches iPhone 6 Sapphire Display Scratched in Test; New Spigen Cases Out
- iPhone 6 2014 Release Date Very Soon as Apple Orders 120M New iPhones from Foxconn – Report
- Google Nexus 6 on Release Date Will Sport 2K Display Panel & Lower Price Tag – Report
- Motorola Moto G Vs. Xiaomi Mi3 – Low in Price, High -level Features
- FCC Approves Sony Xperia Z3 for U.S. Market
- Killer Xiaomi Mi4 at $499 Comes With 5.5-Inch Quad HD Display, Snapdragon 805 Processor, 3GB RAM and More
- End of Times Indicators: Japan’s Mount Fuji in ‘Critical State’ to Erupt, Could Affect At Least 1.2M People