Dell Inc (NASDAQ:DELL) buyout- Southeastern says Icahn and Blackstone offers tops

Boston, MA 04/10/2013 (wallstreetpr) – The money manager Southeastern Asset Management Inc has been opposing the Michael Dell and Silverlake Management LLC$24.4 billion buyout offer of Dell Inc (NASDAQ:DELL) (Closed: $14.19, Down by 0.07%). They said that Blackstone and billionaire Icahn’s offers are a great deal more superior to Dell’s offer. The reason for these proposals being superior is primarily because each of these proposals offers the Dell shareholders the chance to continue being part of Dell. At the same time they also offer shareholders the option of taking a higher cash price and exiting their investment. Icahn and the largest equity firm in the world, Blackstone had put forth individual counter-bids on March 22 which had been the deadline of the go-shop period.

Sound investments
This period is specifically designed for soliciting competing buy-out offers. Icahn would acquire close to 58.1 percent of Dell and had offered $15 per share in cash while Blackstone had offered over $14.25 per share. Both of them had offered existing shareholders the option to remain investors. Southeastern is the biggest outside shareholder that Dell has. They had started buying Dell shares around eight years ago. Last June they had also proposed a leveraged buyout of the Round Rock, Texas-based Company and are of the opinion that the Dell has not provided any sound reasoning about why it should go private at this juncture.

Change of focus?
Right through the proxy, the Dell management had ended up placing a large amount of emphasis on the End User Computing (EUC) or personal computing division that had been steadily shrinking over the years. Southeastern said that Dell has nudged aside the business that focused on enterprise storage and services (ESS) and which was very evidently a more profitable one. This approach had been very contradictory to the one that Dell had adopted earlier wherein the focus had been on ESS said the fund management firm. Since the company had changed its public positioning, the Dell shareholders must question as to why the board has suddenly shifted focus to EUC and veered away from ESS which they previously believed was where business profitability lay.

Southeastern had proposed participating in the leveraged buyout deal that that they had suggested in June, last year. They had planned on doing this by rolling some of their shares into Dell and Michael Dell the Chief Executive Officer had said that he would consider it. On February 5 the Dell board finalized and made an announcement of the merger agreement with Silver Lake while there was no mention anywhere about Southeastern.

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Published by Fiona Gibson

Fiona is a finance graduate and an expert in analyzing market trends.