Dell stockholder slams buyout deal
BY MICHAEL LIEDTKE AP Technology Writer
Saturday, February 09, 2013
2/09/13 at 5:06 AM
SAN FRANCISCO (AP) - Dell Inc.'s decision to sell itself for $24.4 billion to a group led by its founder and CEO is being ridiculed as a rotten deal by a major shareholder who estimates the slumping personal computer maker is really worth $42 billion.
The missive launched Friday by Southeastern Asset Management Inc. threatens to complicate Dell Inc.'s efforts to end its 25-year history as a public company.
In a letter to Dell's board of directors, Southeastern CEO O. Mason Hawkins threatened to lead a shareholder mutiny unless the company came up with an alternative to the deal announced earlier this week.
Hawkins vowed to wield Southeastern's 8.5 percent stake to thwart the deal currently on the table. Only Michael Dell, the Round Rock, Texas-based company's eponymous founder and CEO, owns more stock with a roughly 14 percent stake.
Under Dell's proposal, Southeastern and other stockholders will be paid $13.65 per share to leave the company in control of Michael Dell, who founded the business in 1984.
Michael Dell is contributing about $4.5 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.
Hawkins derided the price of the proposed sale as "woefully inadequate" and laid out a scenario that values Dell at $23.72 per share, or about $42 billion. The per-share amount mirrors Dell's stock price six years ago, when Michael Dell returned for a second go-round as the company's CEO.
Original Print Headline: Stockholder slams $24B Dell buyout deal