Some major Dell shareholders might oppose buyout plan

PC maker Dell announced a plan to take itself back to being a privately run company earlier this week, with some financial help from Microsoft, among others. Now it looks like Dell's leveraged buyout plan might gain some opposition from a number of large shareholders who feel the asking price is too low.

Reuters reports that Southeastern Asset Management sent a letter discussing their issues with the leveraged buyout, which would put a price of $13.65 per share of Dell's stock. Southeastern Asset Management, which owns about 8.5 percent of Dell, said in the letter that it believes the per share price should instead be $24.

The same report claims that three other investors – Harris Associates, Yacktman Asset Management and Pzena Investment Management – all plan to oppose the current deal. Together, the three firms own another 3.3 percent of Dell. So far, Dell has not indicated any plans to raise their per share offer.

If the current plan goes through, it will take about $24 billion for Dell to go private, which will include a $2 billion loan from Microsoft. Dell founder and CEO Michael Dell will put in $500 million of his own money in the deal and another $250 million via his investment company. Dell has until Nov. 5 to back out of the deal if they choose to do so.

Source: Reuters | Image via Dell

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10 Comments

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I will never understand these people. First they panic and sell off their stocks, now they are complaining for the low market cap? Ridiculous. They have only themselves to blame.

Dell hasn't been worth anything near $24 since September, 2008. Since then, the stock market has largely recovered its value, but Dell has not even though it capped off in February 2012 at $18. Not coincidentally, Dell has not done anything that represents a serious threat to any of their competition, including the rising Apple, which does not represent a serious enterprise threat, but it does represent an image threat.

So, 11.8% may vote no while the rest will vote yes. You'd be crazy to think that Dell is worth around $40 billion. Clearly, Dell needs to get away from appeasing such stupid stakeholders.

Bankrupt the company and let's see how $13.65 sounds then. greedy shareholders. No wonder companies are always finding ways to cook books to appease the large shareholders. I am a shareholder not big but I have some and I am okay with the buyout..

mrmomoman said,
Bankrupt the company and let's see how $13.65 sounds then. greedy shareholders. No wonder companies are always finding ways to cook books to appease the large shareholders. I am a shareholder not big but I have some and I am okay with the buyout..

big shareholders sometimes push companies to bankrupsy just to manipulate the liquidation so the big holders get paid out first, and the common holders get nothing

dvb2000 said,
lol - what a surprise - "shareholders" want more money.

I'm not sure I understand the sarcastic nature of your comment. Yes "shareholders", the people who invest their own money into a company, want to see a greater return on their investments.

xp1ode said,
The point being that shareholders are never satisfied. You know, is that whole greed concept.

You know, It's quite possible (especially since they own such a large portion) that they invested when the stock was worth more and are trying to reduce their losses.

SOOPRcow said,

You know, It's quite possible (especially since they own such a large portion) that they invested when the stock was worth more and are trying to reduce their losses.


Investors, most of them loan money to do their first share, very few ever earned their own money to do so.
Most of them loose it all on first try, guess who is going to pay?