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Dell board rejects revised buyout proposal

The special committee of Dell's (DELL) board rejects Michael Dell/Silver Lake's offer to raise their bid to $13.75 in exchange for an alteration in voting rules

The board will consider a new date for a vote on a $13.75 deal, but only under current rules in which abstentions would be counted as the equivalent of "no" votes.

The alternative is to proceed with a vote as planned on August 2 for the existing $13.65 offer.

Shares -1.3% premarket to $12.69.

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Comments (5)
  • NWInvestments
    , contributor
    Comments (27) | Send Message
    Finally! The board grew a spine all the sudden.
    31 Jul 2013, 09:08 AM Reply Like
  • kingcozzi
    , contributor
    Comments (127) | Send Message
    This whole situation wouldnt have happened if Michael didn't try and take it private. Now Icahn has a chance of controlling Dell.
    31 Jul 2013, 10:50 AM Reply Like
  • CDM Capital
    , contributor
    Comments (458) | Send Message
    DELL is worth around $20 in our estimates. Just look at DELL's closest competitor HPQ, and the huge run-up off the lows, up over 100%. DELL would be better off with no offer in our view, probably worth $15-16 fair value on freely traded shares.


    Great arbitrage play here in our view.
    31 Jul 2013, 11:00 AM Reply Like
  • nickbukowski
    , contributor
    Comments (50) | Send Message
    I'm not so sure about that. If anything, having a buy-out offer (or two) should help boost the stock and at least provide some support. That's not happening. And DELL's forward p/e is 12.27 for the next 12 months. HPQ's is 7.23. If you gave DELL the same p/e ratio as HPQ, the share price would have to drop to $7.37/share. I own HPQ (bought around 12.50/share) and I recently bought DELL at 12.80/share, not because I thought it was worth that, but because I thought this deal would go through and I'd make a quick return. I'm regretting that now...But there's still hope. Things will get interesting soon. One caveat to this all though...a lot of people are speculating that the current offer is way too low, that it's really worth $15 or $20 or $28 or $30 per share. I don't frankly buy that. If that were the case, why is the price crashing? It can even maintain the $13.65 offer price.
    31 Jul 2013, 11:50 AM Reply Like
  • NWInvestments
    , contributor
    Comments (27) | Send Message
    One very simple reason, because the LBO offer is acting as a ceiling on the stock.


    One more very simple reason, is that Michael Dell is crashing earnings to make the company look expensive. He is not doing it illegally, he is doing it legally. He is simply offering customers massive discounts to gain share, and he is spending money every chance he gets. As soon as his go private transaction is over with, he will repeal those discounts, he will return to going for profitability and he sill stop blowing money.
    31 Jul 2013, 01:15 PM Reply Like
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