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Dell investors oppose $24bn buyout plan

New York, February 10, 2013

Three of Dell's largest investors joined Southeastern Asset Management in objecting to a $24.4 billion buyout of the No 3 PC maker led by chief executive Michael Dell, sources said, as opposition grows to the largest buyout since the start of the financial crisis.

Top independent shareholder Southeastern formally voiced its opposition galvanising other investors.

The sources said that Harris Associates, Yacktman Asset Management and Pzena Investment Management - which together hold 3.3 per cent of Dell's outstanding stock according to Thomson Reuters data - now plan to vote against a buyout that would end Dell's turbulent 24-year ride on public markets.

That means that four of Dell's 20 largest shareholders harbour misgivings about a deal to take private a company struggling to grow revenue as the global PC industry heads into decline. Dell is now trying to transform itself into a provider of enterprise services in the mold of IBM.

Harris and Yacktman did not respond to requests for comment.

With the latest additions to the chorus, shareholders representing almost 14 per cent of Dell shares not held by Michael Dell have now said they will vote against the deal. Billionaire Dell holds a roughly 16 per cent stake.

Dell shares rose on Friday after Southeastern's announcement, briefly trading above the $13.65 offer price before settling slightly to close up 0.7 per cent at $13.63.

"We are writing to express our extreme disappointment regarding the proposed go-private transaction, which we believe grossly undervalues the Company," Southeastern CEO Mason Hawkins and chief investment officer Staley Cates said.-Reuters




Tags: Dell | Buyout |

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