The Canadian Press - ONLINE EDITION

Dell looks to calm shareholder concern about its proposed $24.4 billion acquisition

  • Print

NEW YORK, N.Y. - Dell is trying to reassure shareholders about its proposed $24.4 billion acquisition by a group led by its founder, saying it considered a number of strategic options before agreeing to the deal.

Dell Inc. laid out the advantages of the transaction in a regulatory filing Monday, three days after a major shareholder ridiculed the buyout as a rotten deal that undervalues the business.

On Friday, Southeastern Asset Management Inc. sent a letter to Dell's board of directors. Southeastern CEO O. Mason Hawkins threatened to lead a shareholder mutiny unless Dell came up with an alternative acquisition offer.

Hawkins vowed to wield Southeastern's 8.5 per cent stake to thwart the deal currently on the table. Only Michael Dell, the computer company's founder and CEO, owns more stock with a roughly 14 per cent stake.

Round Rock, Texas-based Dell said in its filing that it determined with independent advisers that the cash bid by a group led by Michael Dell was in the best interests of stockholders.

Dell also said the deal allows time for alternate bids do that shareholders will be able to see if there are superior options available.

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 his University of Texas dorm room 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. The loans will burden Dell with debts that could leave the company with less money to invest in innovation and acquisitions.

Dell said Monday that the deal "shifts the risks facing the business to the buyer group."

The proposed $24.4 billion purchase price is 80 per cent below Dell's top market value of more than $150 billion at the peak of the dot-com boom 13 years ago. The $13.65 per share offer is 25 per cent above where Dell's stock stood last month, before word of the buyout negotiations leaked out in the media. Dell's stock has plunged during the past year as PC sales have slumped amid the technological upheaval caused by the growing popularity of smartphones and tablet computers.

Dell shares closed up 7 cents at $13.70 on Monday.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Perry Bellegarde elected as national chief of Assembly of First Nations

View more like this

Photo Store Gallery

  • A monarch butterfly looks for nectar in Mexican sunflowers at Winnipeg's Assiniboine Park Monday afternoon-Monarch butterflys start their annual migration usually in late August with the first sign of frost- Standup photo– August 22, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • A goose heads for shade in the sunshine Friday afternoon at Woodsworth Park in Winnipeg - Day 26– June 22, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Will you watch The Interview?

View Results

View Related Story

Ads by Google