Some Dell shareholders plan to vote against CEO's buyout

Thu Jul 11, 2013 5:24pm EDT
 
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* Highfields to vote against Dell buyout -sources

* Managers use proxy recommendations as one of many data points

By Jessica Toonkel

NEW YORK, July 11 (Reuters) - At least three shareholders who collectively hold nearly 3 percent of Dell Inc's shares plan to vote against Chief Executive Michael Dell's $24.4 billion buyout offer, raising questions about shareholder proxy adviser Institutional Shareholder Services' sway with the PC maker's shareholders.

The three managers - Highfields Capital Management, Pzena Investment Management and Yacktman Asset Management - owned 50.65 million shares combined out of the PC maker's 1.76 billion shares outstanding as of March 31, according to Thomson Reuters data.

Boston-based investment management firm Highfields Capital Management, which held a 1.3 percent stake in Dell as of March 31, plans to vote against the buyout by Mr. Dell and private equity firm Silver Lake, sources familiar with the situation said on Thursday. The sources wished to remain anonymous because they are not permitted to speak to the media.

On Monday, Richard Pzena of Pzena Investment Management, which owns a 0.7 percent stake, told CNBC he will vote against the Dell buyout proposal. The following day, Yacktman Asset Management, which has a 0.85 percent stake, said it too would vote against the Dell buyout, in favor of Carl Icahn and Southeastern Asset management's buyout proposal of the company.

Institutional Shareholders Services (ISS) is recommending shareholders accept Mr. Dell's proposal.

"ISS' role is to analyze the deal and make a recommendation that we see as being in the best interest of shareholders. That's what we've done in concluding that taking $13.65 (per share) now is a better alternative than continuing to hold equity in a publicly-traded Dell," an ISS spokeswoman said in an e-mail to Reuters.   Continued...