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Three Dell (DELL +0.7%) investors owning a combined 3.3% of the company - Harris Associates,...

Three Dell (DELL +0.7%) investors owning a combined 3.3% of the company - Harris Associates, Yacktman Asset Management, and Pzena Investment Managment - have joined Southeastern Asset Management (8.5% stake) in opposing the Dell LBO, Reuters reports. Dell ticked higher to $13.63 today, putting it within a hair's breadth of its $13.65/share LBO price. For now at least, the LBO consortium isn't budging.
Comments (17)
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    There will probably be more to come. Mason Hawkins from Southeastern Asset Management is such a respected value investor that his words carry a lot of weight (at least they do with me).
    8 Feb 2013, 07:13 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (780) | Send Message
     
    Buying $14 call options with an April strike date might be a good bet right here. Assuming you are up for a little gamble? My gut tells me that this $13.65 LBO price isn't final by a long shot.
    8 Feb 2013, 07:45 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (778) | Send Message
     
    In my opinion it is virtually guaranteed that the price will rise. Your risk is that the deal gets blocked by the government due to MSFTs involvement. That is why it is not trading over $14.00, in my view.
    8 Feb 2013, 08:04 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    For what it is worth, we doubt that it will get blocked, especially given that MSFT's involvement is via debt instead of equity.
    8 Feb 2013, 08:12 PM Reply Like
  • moneyTalksBSWalks
    , contributor
    Comments (193) | Send Message
     
    Imo there is plenty of competition in the hardware space for MSFT involvement to be a non issue. Lenovo, HP, Sony, Toshiba, Apple, etc.
    8 Feb 2013, 08:29 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1000) | Send Message
     
    With DELL going private, the company has a better chance at thinking more long term with regard to R&D and innovation. Shareholders may have been holding the company back with too much of a myopic Q/Q perspective.

     

    DELL needs to make changes to reinvent itself imo
    8 Feb 2013, 08:26 PM Reply Like
  • moneyTalksBSWalks
    , contributor
    Comments (193) | Send Message
     
    Vanguard and T Rowe are the #2 and 3 largest holders. If they join Hawkins, trouble ahead for the deal.
    8 Feb 2013, 08:27 PM Reply Like
  • Van Hyder
    , contributor
    Comments (162) | Send Message
     
    Hasn't anyone watched the movie Wall Street, they'll just agree to a higher price behind close doors then trade the shares in a dark pool and then announce the LBO price is still $13.65. If you're betting on making money on this going to $14 or $15 you'll lose.
    8 Feb 2013, 09:05 PM Reply Like
  • WallStreetDebunker
    , contributor
    Comments (2278) | Send Message
     
    The granularity of the deal is peculiar. $13.65? Why not $14 or $13 or $13.50. I'm guessing that all the major players are "holding onto their nickels so tightly that the buffalos sh*t". Hard to see another couple of bucks come into the deal.
    8 Feb 2013, 10:57 PM Reply Like
  • Logical Thought
    , contributor
    Comments (4225) | Send Message
     
    I'm sure they used a very "precise" "garbage in-garbage out formula" and the .65 is there to provide the illusion of "fairness opinion exactitude."

     

    Regardless, I don't see why anyone thinks that Dell will do any better as a private company than it did as a public one-- after all, it isn't as if Michael Dell hasn't been able to do pretty much whatever the hell he wants all the years that the company has been public.
    9 Feb 2013, 12:03 AM Reply Like
  • WallStreetDebunker
    , contributor
    Comments (2278) | Send Message
     
    I've got a solution for the underwater shareholders like Southeastern. It's time to play hardball. I've read that Mr. Dell is interested in resurrecting his legacy. Southeastern needs to tell Mr. Dell that they've rounded up enough votes to takeover the board--and that they're going to radically transform the company in 100 days:

     

    First, they'll evict Michael from his job. Next, they'll bring back Steven the Dell Dude for advertising and rename the company Dude Computers. Then they'll partner with another over-the-hill tech company, Blackberry, to co-release a line of branded smart phones aimed at urban customers. Steven the former Dell Dude will wear gangsta clothing and do hip hop rhymes as he hypes up the new bling-encrusted BlackDudeBerry phones.

     

    Michael Dell would probably be so horrified that he'll pressure his buddies at Microsoft to come up with another few billion dollars to make Southeastern go away.
    9 Feb 2013, 11:41 PM Reply Like
  • Leo50
    , contributor
    Comments (120) | Send Message
     
    They always start low as in buying low. Just like any business transaction. Yeah, put some pressure on 'em guys to raise the price. They are expecting it. Don't let Michael Hell Dell get away with it.
    8 Feb 2013, 11:27 PM Reply Like
  • Beestings
    , contributor
    Comments (16) | Send Message
     
    Leo50,
    I agree, Mr Dell should not get away with this.
    If the SEC will do Zero, it is up to the Shareholders.
    I good Start for Legal Action is here:
    http://bit.ly/XUtKLH
    10 Feb 2013, 12:05 AM Reply Like
  • raokodali
    , contributor
    Comments (2) | Send Message
     
    Wait till the share price touches $14 before investing.
    10 Feb 2013, 10:18 AM Reply Like
  • S6730
    , contributor
    Comments (2) | Send Message
     
    Dell has spent our money reinventing our company. Now he wants to get rid of us stockholders just before the rewards that we have paid for come into focus.

     

    What a rotten trick!
    10 Feb 2013, 10:28 AM Reply Like
  • Hendershott
    , contributor
    Comments (1498) | Send Message
     
    The value of Dell is what someone is willing to pay for it. Where are the competing bids? What's the liquidation value?
    10 Feb 2013, 10:38 AM Reply Like
  • Martin Opsahl
    , contributor
    Comments (3) | Send Message
     
    I am not going to pretend to be the smartest the guy in the room, nor do I understand all the ins and outs of trading stock... but, I did learn about capitalism in High School. I learned that a widget is only worth as much as someone is willing to pay for it. Supply and Demand. Dell stock was trading at $10 - $11 a share before the announcement of the LBO. It shot up roughly 20% almost overnight. So, my question is simple: What is the true value of Dell's stock? Is it the pre-LBO announcement price - or the post-LBO announcement price? My gut tells me it's closer to the former than the latter.
    If you take in to consideration the speculation that Dell is going to announce a significant decrease in Y/Y earnings over last year - why would the stock be valued higher than $13.65? If it is truly worth $24 or $25 a share, why is it not trading there now? Pure speculation? Wishful thinking over a bad investment? Or, maybe it's just pure greed driving individuals to squeeze a successful businessman for every penny they can because it's easier than mimicking Michael's own success. What would the price of the stock be if Michael and Silver Leaf pull their offer off the table entirely, and kept the company public? Would it magically jump to $25/share, and wipe a sweaty brow after narrowly missing a fast moving LBO? Or... would it tumble past it's pre-LBO announcement price, well into the single digits? That may be a tougher question than it seems... at least, as tough as someone is willing to make it. But, if it were my money, I would get out of the way and pick up a well performing stock that doesn't have all the drama attached to it. I like life simple like that though... may not be for everyone.
    13 Feb 2013, 04:49 AM Reply Like
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