Dell sees opposition from another big shareholder
BY MICHAEL LIEDTKE Associated Press
Wednesday, February 13, 2013
2/13/13 at 3:38 AM
SAN FRANCISCO - A shareholder rebellion against Dell's proposed $24.4 billion sale to its founder and other investors is gaining more support, fueling a belief that the struggling personal computer maker will have to wrangle a higher price to get the deal done.
Mutual fund firm T. Rowe Price joined the opposition Tuesday. T. Rowe Price and another shareholder, Southeastern Asset Management, believe that founder and CEO Michael Dell and the investment firm Silver Lake are being allowed to seize control and end Dell Inc.'s 25-year history as a publicly held company for too little money.
"We believe the proposed buyout does not reflect the value of Dell, and we do not intend to support the offer as put forward," T. Rowe Price Chairman Brian Rogers said in a statement.
T. Rowe Price and Southeastern are the two largest independent shareholders and own nearly 13 percent of the company combined. Michael Dell has committed his 14 percent stake toward the deal, but he is the only investor to own more stock than either of the two opponents of the deal.
It's still unclear how other large Dell shareholders feel about the deal, but the opinions of Southeastern and T. Rowe Price seem likely to embolden others to join the resistance. Southeastern owns an 8.4 percent stake in Dell, according to a Tuesday regulatory filing that revised the size of its stake from 8.5 percent in documents submitted last week. T. Rowe Price owns a 4.4 percent stake in Dell, according to FactSet.
Michael Dell is contributing his holdings to the proposed sale, along with cash that will bring his total financial commitment to about $4.5 billion. The rest of the proposed deal's financing is being provided by Silver Lake and loans from Microsoft Corp. and an array of banks.
In a Tuesday research note, Jefferies analyst Peter Misek predicted the current offer will have to be sweetened to $15 per share, or nearly $27 billion, to placate riled shareholders.
Original Print Headline: Another shareholder opposes Dell buyout