Dell: $24.4 Billion Buyout Deal in Best Interest of Shareholders
Dell's $24.4 billion buyout deal, led by founder and Chief Executive Michael Dell, is in the best interest of shareholders, the company's board of directors said in a filing with the U.S. Securities and Exchange Commission Monday.
"The transaction offers an attractive and immediate premium for stockholders and shifts the risks facing the business to the buyer group," the board said in its filing. "In addition, and importantly, the go-shop process provides stockholders an opportunity to determine if there are alternatives that are superior to the present offer."
The board considered a number of strategic alternatives, according to the filing. In addition to working through financial and capital allocation issues with its financial advisors, it retained a consultant to help it assess the company's strategic position. Based on its findings, the board said, "the proposed all-cash transaction is in the best interests of stockholders."
The filing comes as three of Dell's largest investors joined Southeastern Asset Management on Friday in objecting to a $24.4 billion buyout of the No. 3 PC maker.
Top independent shareholder Southeastern formally voiced its opposition, which Reuters first reported late on Thursday, galvanizing other investors.
The sources told Reuters that Harris Associates, Yacktman Asset Management, and Pzena Investment Management — which together hold 3.3 percent of Dell's outstanding stock according to Thomson Reuters data — now plan to vote against a buyout that would end Dell's turbulent 24-year ride on public markets.
That means that four of Dell's 20 largest shareholders harbor misgivings about a deal to take private a company struggling to grow revenue as the global PC industry heads into decline. Dell Inc is now trying to transform itself into a provider of enterprise services in the mold of International Business Machines.
Harris and Yacktman did not respond to requests for comment.
—Reuters contributed to this report.