Dell's Largest Investor Plans To Block Company's Bayout
Southeastern Asset Management, Inc. the largest outside shareholder of Dell, has sent a letter to the Board of Directors of Dell noting that it believes Dell's proposed go-private transaction grossly undervalues the company.
Southeastern said it would not vote in favor of the transaction as currently structured. The company plans to oppose the announced transaction through a proxy fight, litigation claims and any available Delaware statutory appraisal rights.
The Memphis, Tennessee-based fund owns on behalf of its investment advisor clients approximately 8.5% of Dell's outstanding shares (including options).
Southeastern filed the letter with the SEC in an SC 13D today. In its letter, Southeastern notes that it believes that the proposed transaction, under which Dell's public shareholders would receive only $13.65 per share, represents "an opportunistically-timed bid to take the company private at valuations far below Dell's inherent value, and deprives public shareholders of the ability to participate in the future upside of the company."
Under Dell's buyout's terms by Michael Dell and the private equity firm Silver Lake, a majority of shares not held by Michael Dell must be voted in favor of the deal for it to proceed.
Dell has not commented on Southeastern's letter yet.
The Memphis, Tennessee-based fund owns on behalf of its investment advisor clients approximately 8.5% of Dell's outstanding shares (including options).
Southeastern filed the letter with the SEC in an SC 13D today. In its letter, Southeastern notes that it believes that the proposed transaction, under which Dell's public shareholders would receive only $13.65 per share, represents "an opportunistically-timed bid to take the company private at valuations far below Dell's inherent value, and deprives public shareholders of the ability to participate in the future upside of the company."
Under Dell's buyout's terms by Michael Dell and the private equity firm Silver Lake, a majority of shares not held by Michael Dell must be voted in favor of the deal for it to proceed.
Dell has not commented on Southeastern's letter yet.