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Dell Committee: A Sale Is Best For Shareholders

NEW YORK ( TheStreet) -- A sale is best for Dell's (DELL) shareholders, according to a statement released by the special committee set up to evaluate the PC giant's strategic alternatives.

Dell announced last month that founder and CEO Michael Dell and private-equity firm Silver Lake Partners are acquiring the company in a $24.4 billion deal. Under the terms of the transaction, Dell shareholders will receive $13.65 a share in cash, a premium of 25% to the company's closing price Jan. 11, when rumors of the deal emerged.

However, critics such as Southeastern Asset Management, Dell's second-largest shareholder, have called for a higher premium.

The special committee of independent directors set up to weigh the company's options defended its decision in a statement released early on Wednesday.

"The Special Committee unanimously determined that the sale of the Company would be the best alternative for stockholders," it said. "We negotiated aggressively to ensure that stockholders received the best possible value and agreed to a $13.65 per share transaction that provides value certainty at a 37% premium above the average price for the 90 days before rumors regarding the transaction surfaced."

The alternatives available to Dell included continuing with or modifying the company's existing business plan, conducting a leveraged recapitalization, changing the company's dividend policy, and potentially selling all or parts of the business.

"We further insisted on a number of important provisions in the transaction to protect and maximize value for stockholders," added the committee, in its statement. "These include a low break-up fee and a robust go-shop process under a fee structure that incentivizes our financial adviser, Evercore, to find a superior deal if one exists."

"Evercore is actively soliciting potential alternative proposals now in a process that concludes March 22, and we will continue negotiations past that date if a potentially superior proposal emerges," according to the committee's statement. "We also insisted on a requirement that holders of a majority of the shares not held by Mr. Dell or members of management approve the transaction before it can be completed."

The special committee was formed in August 2012 after Michael Dell first approached Dell's board with an interest in taking the company private.

Dell shares dipped 0.36% to $14.02 shortly after market open on Wednesday.

--Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com

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