Major investor opposes $24.4-bn Dell deal

09 Feb 2013

1

Southeastern Asset Management, one of Dell Inc's largest investors has opposed the $24.4-billion proposed sale of the world's third-largest PC maker by a consortium led by its founder and CEO, Michael Dell, saying that the deal ''grossly undervalues the company.''

Harris Associates, Yacktman Asset Management and Pzena Investment Management, which together hold 3.3 per cent, have now joined Southeastern's bandwagon in opposing the deal.

In a letter to Dell's board, Southeastern, run by contentious investors, Staley Cates and Mason Hawkins, holding an 8.5-per cent stake in Dell, expressed ''extreme disappointment'' with the proposed deal and said it would vote against its current structure.

Early this month, Michael Dell, in partnership with global technology investment firm Silver Lake Partners, offered to buy the company for $13.65 in cash, valuing the personal computer maker at approximately $24.4 billion. (See: Dell sells itself to Michael Dell and Silver Lake in a $24.4 billion deal)

The offer price is a premium of approximately 35 per cent over Dell's enterprise value as of 11 January 2013; and a premium of approximately 37 per cent over the average closing share price during the previous 90 calendar days ended 11 January 2013.

The sale has been agreed to by a Special Committee headed by lead director Alex Mandl with advise from independent legal advisors JP Morgan and Debevoise & Plimpton on strategic alternatives.

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