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Dell CEO Michael Dell  (Source: thetechblock)
Some shareholders want more $$$

Dell Inc. founder Michael Dell along with a consortium of partners has been working hard to buy all outstanding shares of Dell stock and take the company private. The current offer on the table from Dell and his partners is $13.65 per share according to sources. However, some shareholders believe that stock in the company is worth more than $20 per share.

Reuters reports that Harris Associates LP, Yacktman Asset Management, and Pzena Investment Management LLC have all banded together with Southeastern to object to the $24.4 billion buyout offer.

Harris Associates LP, Yacktman Asset Management, and Pzena Investment Management LLC together own a combined 3.3% of outstanding Dell stock. Southeastern owns 8.5% of Dell and believes that it shares are worth $24 each with the financial services division in recent acquisitions figured in.

"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 wrote in a letter.

"We retain and intend to avail ourselves of all options at our disposal to oppose the proposed transaction, including but not limited to a proxy fight, litigation claims and any available Delaware statutory appraisal rights."
 
Southwestern believes that breaking up the company and selling units separately would be more beneficial to shareholders.

Source: Reuters



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Currently trading at $13.63...
By tayb on 2/11/2013 8:54:18 AM , Rating: 1
It's currently trading just a couple of cents below the proposed offer. That isn't much of a buyout in my opinion. These guys could just sell right now and make almost as much money. What is the incentive to accept this deal?

I think they're crazy asking for $20 though. It hasn't been above $20 since 2008.




RE: Currently trading at $13.63...
By menting on 2/11/2013 9:08:27 AM , Rating: 2
of course it'll trade just a bit below the proposed offer. The stocks will go up or down to meet the buyout offer.


RE: Currently trading at $13.63...
By Samus on 2/11/2013 12:21:25 PM , Rating: 3
Yes, but this situation of "buyer remorse" is typical in go-private scenarios. These investment firms probably purchased Dell stock in its heyday when it traded in the $20's. Tough.


By Marlin1975 on 2/11/2013 9:55:42 AM , Rating: 3
Dells stock was in the $9-10 range before the offer, it was dropping pretty quick before the offer as well.

The price will always rise to the offer price once its made as people buy it all up at right below the offer price in hopes the deal goes through and they make a quick safe buck.


RE: Currently trading at $13.63...
By XZerg on 2/11/2013 10:26:43 AM , Rating: 2
What you don't know and is why you think the deal is raw because Michael Dell had made it known that he wanted to go private many months back when the stock price was below $9, near 30%+ jump since. This is just writing it on the stone.

The same story is out for Best Buy in case you didn't know. The founder has offered to go private and is probably pursuing some way to do it just like how Michael Dell did.

The only reason that it hasn't hit the selling price and people are trading the stock is because this offer has not been accepted and may require SEC approvals too. Regardless Michael may come out happy as the terms of the deal back-out gets the group 8+ digits figure, even more (~$1B) if Dell takes another party's offer.


RE: Currently trading at $13.63...
By rdhood on 2/11/2013 11:25:50 AM , Rating: 2
quote:
I think they're crazy asking for $20 though. It hasn't been above $20 since 2008.


Reminds me of the attempted buyout of Yahoo by Microsoft for $32 a share. Yahoo shareholders let their greed dominate their common sense.

Hint: when your share price is diving, when your traditional business is slowly dying, when the offer price is already 30% higher than the current share price, etc, etc. , TAKE THE DAMN OFFER.


RE: Currently trading at $13.63...
By bsd228 on 2/11/2013 3:57:02 PM , Rating: 2
> It's currently trading just a couple of cents below the proposed offer. That isn't much of a buyout in my opinion.

Look at the 3 month chart. Note the spike. That came from the buyout. For small investors, it often makes more sense to sell once the market resets at that price (give or take a few pennies). Then unless the deal falls apart, the price won't move, but you may have to wait a few weeks to collect, and in some cases the transaction cost of the deal is higher than the typical trading cost (say $50 versus $10). And if the deal falls, usually the price sinks.

This is a shakedown for money by a large institutional investor. They may want to say it's worth $24, more than twice as much as it has been selling for, but there's little to support the theory.


RE: Currently trading at $13.63...
By Solandri on 2/11/2013 10:18:15 PM , Rating: 3
This is really simple. If you think the stock is worth $20 and it's currently selling for $13.63, then by your estimation the stock is vastly underpriced and you buy all the shares you can. You don't sit there complaining that someone else should be buying your shares for $20. If you're unwilling to buy my Dell shares for, say, $19, then obviously you don't think it's really worth $20.


RE: Currently trading at $13.63...
By JPForums on 2/13/2013 9:08:00 AM , Rating: 2
This pretty much sums it all up in a nutshell.


"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher

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