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Friday, 08 February 2013 11:52

Dell shareholders are revolting

Written by Nick Farrell



No wonder he wants to go private

Dell's largest independent shareholder, Southeastern Asset Management is furious that the PC maker is taking his company private.

It has told Dell that a $24.4 billion buyout bid undervalues it, adding to a chorus of investor dissatisfaction with the landmark deal to take it private. Southeastern has told the company that it is "disturbed" by a $13.65 per share offer for the third-largest PC maker by a consortium led by founder and CEO Michael Dell, and instead believes Dell is worth $20 per share.

Southeastern owns a 7.5 percent stake in Dell and so its views are fairly important. Chief Executive Mason Hawkins said in a September 30 filing that the fund believed the company's shares were worth in the "low 20s" even if Dell's personal computing business was valued at nothing.

The buyout consortium has no plans to raise its current bid. They are hoping that shareholders will release that they will get much less if they don’t back the deal. But over the past few days, some other Dell shareholders have indicated they will vote against the deal.

But it is Southeastern stands to be among the biggest losers if the deal is completed at the current price. The outfit paid more $20 a share for its stake, meaning a loss of at least $825 million if it goes ahead.

Nick Farrell

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