This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Major Dell Shareholder Favors Recent Buyout Offers

The deal with Michael Dell and Silver Lake would end Dell Inc.'s 25-year history as a public company, allowing a potential turnaround to be worked out away from the scrutiny and pressure of Wall Street.

With an 8.4 percent stake, Southeastern is Dell's second-largest shareholder after Michael Dell, who still owns 14 percent of the company that he founded as a college student in 1984.

That makes Southeastern a potentially influential player in Dell Inc.'s fate. Michael Dell is contributing $4.5 billion in cash and stock to the deal he worked out with Silver Lake because that agreement will leave him in control of the Round Rock, Texas, company.

It's unclear if Blackstone or Icahn will negotiate a similar arrangement with Michael Dell, who has said he is willing to work with the alternative bidders.

If Michael Dell remains exclusively aligned with Silver Lake, Blackstone and Icahn would either have to line up even more financing to pay for their proposed deals or find other ways to replace the cash and stock that Michael Dell could contribute. One way to do that would be to persuade Southeastern and other existing Dell shareholders to contribute some of their stock.

Southeastern didn't delve into that possibility in its Tuesday letter. But the firm called the Blackstone and Icahn bids better deals than the one worked out with Michael Dell.

"We view these proposals as superior primarily because each offers shareholders the opportunity to remain owners of Dell while also offering a higher cash price to owners who choose to exit their investment," Hawkins and Cates wrote. They urged Dell's special committee to negotiate with the alternative bidders in "good faith."

In a statement, the Dell committee said it's still backing the deal with Michael Dell and Silver Lake while it assess the alternate proposals. Both Blackstone and Icahn are reviewing Dell Inc.'s books before taking the next step in their bids.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs