Top shareholder demands Dell open books as buyout looms

Tue Mar 5, 2013 4:05pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Poornima Gupta

(Reuters) - Dell Inc's largest external shareholder is demanding that the PC maker open its books, signaling it could become more active in opposing founder Michael Dell's proposal to take the company private for more than $24 billion.

Southeastern Asset Management, the largest of a clutch of investors who say the buyout proposed by Dell and private-equity house Silver Lake sharply undervalues the world's No. 3 PC maker, called for "straightforward information" on behalf of its top client, Longleaf Partners Fund.

The Memphis-based firm run by activist investor Mason Hawkins also criticized the silence of Dell executives about the deal during a February earnings call. In a letter to Dell included with a Tuesday filing, the firm accused the company of emphasizing a decline in PC sales, while ignoring growth in its IT services division, to justify an inadequate buyout price.

"Under the current buyout proposal, management and Silver Lake stand to receive all of the future upside, while denying shareholders, who have paid to reposition the company, the opportunity to reap the rewards of our investment," Southeastern said in its filing.

Michael Dell, teaming up with Silver Lake and top global software maker Microsoft Corp, is offering $13.65 a share to buy out the company, but at least four of its largest investors are opposed to the deal.

Shareholders representing almost 14 percent of Dell shares, led by Southeastern with a stake of more than 8 percent, including options, have said they will vote against the proposed buyout. No. 3 shareholder T. Rowe Price has also spoken out against the deal.

"The company will review the request by Southeastern Asset Management for Dell stockholder lists and other shareholder related information and respond in a timely fashion," Dell spokesman David Frink said on Tuesday.

STONY SILENCE   Continued...

A man wipes the logo of the Dell IT firm at the CeBIT exhibition centre in Hannover February 28, 2010. REUTERS/Thomas Peter