Dell's largest outside shareholder opposes the computer maker's plan to go private, saying that the deal "grossly undervalues the company," according to a letter sent to the Dell board.
The shareholder, Southeastern Asset Management, submitted the letter as part of Securities and Exchange Commission documents filed today. The group owns 8.5 percent of Dell's shares, making it the largest outside shareholder.
Dell announced the $24.4 billion deal, which needs regulatory and shareholder approval, this week. CEO Michael Dell and investment firm Silver Lake are paying $13.65 per share, while Microsoft is contributing a $2 billion loan, to buy back the company's shares. The idea is the transaction would let the struggling company try to turn itself around without the pressure from shareholders.
Southeastern Asset Management said the $13.65 price per share is too low and argued for other options it said would give shareholders more value.
Apparently, it's not the only one. Three of the top 20 shareholders support Southeastern's opposition to the deal, according to a report from Reuters. An unnamed source told Reuters that Harris Associates, Yacktman Asset Management, and Pzena Investment Management, are the shareholders backing Southeastern. The three firms in total own 3.3 percent of shares.
Pzena's chairman, Richard Pzena, told Reuters that the shares should price in the $20 range or Dell should try other options.
Southeastern Asset Management's letter said it's willing to start a proxy fight -- in which it would persuade shareholders to vote out the company management so the company is easier to take over -- or file a lawsuit to stop Dell's action.
We are writing to express our extreme disappointment regarding the proposed go-private transaction, which we believe grossly undervalues the Company. We also write to inform you that we will not vote in favor of the proposed transaction as currently structured. We retain and intend to avail ourselves of all options at our disposal to oppose the proposed transaction, including but not limited to a proxy fight, litigation claims and any available Delaware statutory appraisal rights.