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Dell investor opposes sale to founder

11 Feb 2013 THE AGE


ONE of the biggest investors in PC maker Dell has warned that it will oppose the company's plans to go private, setting up a major potential roadblock for the biggest buyout since the global financial crisis.

Southeastern Asset Management, Dell's largest outside shareholder, argued that the $US24.4 billion ($A23.6 billion) takeover bid was too low.

The company's founder, Michael Dell, and investment firm Silver Lake, are offering $US13.65 a share. Southeastern, which has an 8.5 per cent stake in Dell, reckons the company is worth $US24 a share.

To block the "ill-advised transaction", Southeastern laid out a range of possible tactics, including a proxy fight and lawsuits. It also pushed the board to "aggressively" look for alternative proposals. Dell has 45 days to solicit other bids as part of the so-called go-shop process.

A Dell spokesman said on Friday a special committee of the board had considered various options with the help of advisers before accepting the management buyout.

"The transaction offers an attractive and immediate premium for stockholders and shifts the risks facing the business to the buyer group," the spokesman said.

Analysts estimate that Southeastern paid more than $US20 a share on average, meaning it will lose $US800 million if the current deal is completed.