Some Dell Shareholders Unhappy with "Lowball" Buyout Attempt
February 11, 2013 8:06 AM
comment(s) - last by
Dell CEO Michael Dell
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.
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.
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RE: Currently trading at $13.63...
2/11/2013 3:57:02 PM
> 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.
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