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The group of investors led by Michael Dell is facing a strong opposition to the plan to take the PC maker private. Southeastern Asset Management, the holder of an 8.5% percent stake in Dell, has sent the company a letter, claiming that the $13.65 a share is too low price for the company’s stock and that the owner wants no less than $24 a share. The investor is not alone.

“The price is completely out of proportion to what’s reasonable. Southeastern laid out the case brilliantly; we think $24 a share is fair, said Richard Pzena, founder of Pzena Investment Management, which owns Dell stock, reports Bloomberg news-agency.

Under the terms of the agreement, Dell stockholders will receive $13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately $24.4 billion. The price represents a premium of 25% over Dell’s closing share price of $10.88 on January 11, 2013, the last trading day before rumors of a possible going-private transaction were first published; a premium of approximately 35% over Dell’s enterprise value as of Jan. 11, 2013; and a premium of approximately 37% over the average closing share price during the previous 90 calendar days ending Jan. 11, 2013. The buyers will acquire for cash all of the outstanding shares of Dell not held by Mr. Dell and certain other members of management.

The merger agreement provides for a so-called “go-shop” period, during which the special committee – with the assistance of Evercore Partners – will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals. The initial go-shop period is 45 days.

Keeping in mind that the market of personal computers is not in its best ever condition and it is widely believed that companies like Dell, HP, Microsoft and others have a lot of hidden value, it is logical for different shareholders to demand higher price for their stock.

Tags: Dell, Silver Lake, Microsoft, Business

Discussion

Comments currently: 2
Discussion started: 02/12/13 01:46:40 PM
Latest comment: 04/13/13 04:49:42 PM

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1. 
They want a 140% bonus above the shareprice? Guess extortion is still a business going strong.
0 0 [Posted by: DIREWOLF75  | Date: 02/12/13 01:46:40 PM]
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2. 
Interesting watching Dell's fall from greatness. back in the day they used to at least offer ALL the latest and greatest hardware so the customer could max out performance, if so desired. Then they adopted the "its good enough for the masses" idiots philosophy which is stock in trade for bean counters, and since then major decline. I think this is what Apple may be doing as they abandon their high end power users who want Mac pros and 17" Macbook Pros with lots of options. The reverse halo effect is never pretty.
1 0 [Posted by: beck2448  | Date: 04/13/13 04:49:42 PM]
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