Southeastern Asset Management, the activist investor that owns 8.4 percent
Dell Inc, said on Tuesday the computer maker's evaluation of a
$24.4 billion leveraged buyout deal with its founder and buyout firm
Silver Lake was flawed.
Southeastern published a
letter it sent to Dell's board of directors asserting the company's March
29 proxy statement fails to make a compelling case for shareholders to
accept the $13.65 per share offer from Michael
Dell and Silver Lake. The letter says Dell's special committee
did not properly explore all options.
Citing excerpts from
Dell's proxy statement, Southeastern said the company did not properly
explain why it did not entertain a buyout offer that would allow
shareholders to elect whether they wanted to be paid in cash or stock. It
urged Dell's special committee to negotiate now "in good faith."
Dell has received two
alternative buyout proposals from Blackstone Group LP and billionaire
investor Carl Icahn that Dell has said could ultimately be expected to
result in superior offers. Still, the computer maker has recommended
accepting the offer on the table from Michael Dell and Silver Lake.
Management, the company's largest shareholder after Michael Dell, has been
a staunch opponent of the founder's buyout offer.
Dell was regarded as a
model of innovation as recently as the early 2000s, pioneering online
ordering of custom-configured PCs and working closely with Asian component
suppliers and manufacturers to assure rock-bottom production costs.
But as of 2012's fourth
quarter, Dell's share of the global PC market had slipped to just above 10
percent from 12.5 percent a year earlier, according to research house IDC.
(Reporting by Greg
Roumeliotis and Nicola Leske in New York; Editing by Gerald E. McCormick
and David Gregorio)