Dell investors continue to spread dissent

Dell investors continue to spread dissent

Summary: Dell's largest independent shareholder, Southeastern Asset Management, adds its voice to the idea that Dell's buyout was undervalued.

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TOPICS: Dell
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Southeastern Asset Management Inc is the latest shareholder who has voiced the opinion that the management takeover, worth $24.4 billion, is undervalued.

Reuters reports that the landmark deal to take Dell private has "disturbed" Southeastern Asset Management, according to sources close to the matter.

Led by CEO Michael Dell, the deal secured between the founder and equity firm Silver Lake Management was finalized at $13.65 per share. However, some believe that $20 per share would have been more appropriate for the third-largest PC maker.

Due to be complete by November, going private will save Dell the critical eyes of Wall Street, and remove the necessity of filing both quarterly and annual financial statements publicly. In addition, the management buyout will mean the founder is given the power to change business strategy and streamline operations without answering to shareholders.

In the past few days, other investors have also voiced their displeasure. Dell investor Catherine Christner has filed a suit with Delaware Chancery Court against the computing firm, claiming that that the deal has shortchanged investing parties, and accusing Dell's executives of allowing the PC maker to be sold "on the cheap."

In addition, the publication says that investing parties Alpine Capital Research and Schneider Capital Management -- which own roughly 2,350,000 shares collectively -- plan to vote against the deal. Nick Tompras, president of St Louis. Tompras-based Alpine Capital Research, commented "Let the fools sell low -- don't make us all fools."

If the buyout goes ahead, Southeastern may lose out the most. Having purchased its stake for over $20 a share, the firm may lose close to $825 million based on the $13.65 offer price.

Dell is currently within its 45-day "shop" period, which will allow other bidders to come forward -- but alternative buyers are not expected to appear.

Topic: Dell

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6 comments
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  • Well Silly Southeastern

    Buys Dell shares at overvalued price as PC market dies then whines it's not getting the investment back. Dell were last worth $20 a share in sept 2008

    Take the $13.65 as they are going to be worth less than that. Should have bought apple stock at the time.
    Alan Smithie
  • It's Just Business

    If they offerred $20 a share or $30 or $100, people would complain it's too low. It's the nature of business.

    Who would expect any investment firm to be happy with any offer?
    Regulator1956
  • what I don't understand

    is how can a person be forced to sell their shares? Don't we own them?
    timspublic1@...
    • Laws on Stocks

      If a person/company owns a large enough share, say 80%, they can force the remaining 20% to sell at market value. It's really a protection to ensure that a few holdouts don't demand an exorbitant for their remaining shares.
      technojoe
  • They are worth what someone is willing to pay...

    As nobody is trumping $13 it's a fairly simple scenario. If you get enough clout with $20 your deal will change. What's with the 'investing' facade... it's the biggest gambling market ever and hee haw to do with investing. Your dosh goes nowhere near the business; it goes into an ex stockholders pocket. Get with it.
    johnmckay
  • How about this?

    Allow the shareholders other than those making the offer to vote on the deal. If it's approved, then it should go through; if not then Michael Dell and his partners can negotiate a new deal.'

    Seems fair to me.
    John L. Ries