Dell seeks to calm concerns
Dell laid out the advantages of the transaction in a regulatory filing on Monday, three days after a big shareholder ridiculed the buyout as a rotten deal that undervalues the business.
On Friday, Southeastern Asset Management Inc sent a letter to Dell's board of directors. Southeastern CEO Mason Hawkins threatened to lead a shareholder mutiny unless Dell came up with an alternative acquisition offer.
Hawkins vowed to wield Southeastern's 8.5 per cent stake to thwart the deal that's on the table. Only Michael Dell, the computer company's founder and CEO, owns more stock with a roughly 14 per cent stake.
Texas-based Dell said in its filing that it determined with independent advisers that the cash bid by a group led by Michael Dell was in the best interests of stockholders.
Dell also said the deal allows time for alternative bids so that shareholders will be able to see if there are superior options available.
Southeastern and other stockholders will be paid $US13.65 a share to leave the company in the control of Michael Dell.
Michael Dell is contributing about $US4.5 billion in stock and cash to help pay for the deal. The rest of the money would be supplied by the investment firm Silver Lake, loans from Microsoft Corp and a litany of banks.
Frequently Asked Questions about this Article…
Dell has a proposed US$24.4 billion takeover by a group led by its founder and CEO, Michael Dell. The offer would take the company back under Michael Dell’s control.
Under the proposed deal, shareholders who agree to the takeover would be paid US$13.65 per share in cash.
Michael Dell is contributing about US$4.5 billion in stock and cash toward the deal. The remainder of the financing would come from the private equity firm Silver Lake, loans from Microsoft Corp and a group of banks.
A large shareholder, Southeastern Asset Management Inc, publicly criticised the buyout as undervaluing the business. Southeastern’s CEO Mason Hawkins threatened to lead a shareholder mutiny unless Dell pursued an alternative acquisition offer.
Southeastern Asset Management holds about an 8.5% stake in Dell. Michael Dell is the largest individual shareholder with roughly a 14% stake.
Yes — in a regulatory filing Dell said it and independent advisers determined the cash bid by the group led by Michael Dell was in the best interests of stockholders and laid out the advantages of the transaction.
According to Dell’s filing, the deal allows time for alternative bids so shareholders can see if there are superior options available.
Everyday investors should note the key facts disclosed so far: the US$24.4 billion buyout led by Michael Dell, the US$13.65 per-share cash offer, the involvement of Silver Lake and Microsoft loans, and the public opposition from a large shareholder (Southeastern). Upcoming regulatory filings, any alternative bids and shareholder votes will be important developments to follow.
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