This Day On The Street
Continue to site
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

T. Rowe Price Continues to Reject $24.4B Dell Takeover

NEW YORK ( TheStreet) - T. Rowe Price, a key institutional Dell (DELL) shareholder, continues to reject the PC-maker's $13.65 a share takeover proposed by founder Michael Dell and private equity giant Silver Lake Partners.

The money management firm on Monday reiterated its lack of support for the buyout, which values Dell at $24.4 billion, however it did not say whether it was supporting an alternative proposal floated by billionaire activist investor Carl C. Icahn.

"We continue to believe the proposed buyout does not reflect the value of Dell and we do not intend to support the offer as put forward," Brian Rogers, Chairman and Chief Investment Officer at T. Rowe Price, said in an e-mailed statement.

T. Rowe Price owns about 4.1% of Dell's outstanding shares, according to Sept. 30 Securities and Exchange Commission filings.

Icahn is now Dell's largest independent shareholder after acquiring a significant portion of Southeastern Asset Management's holding of the struggling PC-maker in June. In recent weeks, Icahn has made repeated efforts to keep alive an alternative takeover plan for Dell.

Earlier in July, Icahn said he would add a warrant to his existing $14 a share tender offer for the majority shares. The warrant, which Icahn says is worth up to $4 a share to current investors, will give Dell shareholders the right to buy a Dell share for $20 within the next seven years for every four shares they tender to his offer.

Icahn's warrant and T. Rowe Price's continued resistance to Michael Dell and Silver Lake's takeover continues to add new drama to Dell's buyout ahead of the company's July 18 shareholder meeting.

Topeka Capital Markets analyst Brian White believes the offer should add suspense to the upcoming shareholder vote. "We believe Mr. Icahn's deal is credible and provides shareholders with a better offer, which we expect will make the July 18 vote a real cliffhanger," White wrote in a Friday client note.

Since Michael Dell and Silver Lake unveiled their takeover on February 5 most news has broken in the favor of the buyout consortium.

Dell and a special committee tasked with finding higher bidders for the company both support the $13.65 a share takeover transaction and continue to see weakness in the financial strength and value of Icahn's offer.

Meanwhile, after Icahn cobbled together $5.2 billion in financing from his own pocket, investment bank Jefferies and a coterie of debt market investors, prominent proxy advisory firm Institutional Shareholder Service recommended investors accept the Michael Dell and Silver Lake offer.

I.S.S., however, didn't analyze Icahn's competing proposal given that the activist only seeks to acquire about 72% of Dell's outstanding shares.

For his part, Icahn has rejected the analysis of I.S.S. and Dell's board. He says the buyout consortium is using scare tactics to get shareholders to back their offer and insists Dell's declining PC business and its enterprise software assets are worth far more than $13.65 a share.

In public filings, Icahn counts investors such as T. Rowe Price, Southeastern Asset Management, Yacktman Asset Management and Pzena Investments as supportive of his takeover proposals.

Shareholders are scheduled to vote on July 18 on the $24.4 billion buyout.

Dell shares were trading lower by 13 cents in Monday afternoon trading to $13.19.

-- Written by Antoine Gara and Chris Ciaccia in New York

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DELL $0.00 0.00%
IEP $74.10 -1.60%
AAPL $118.55 0.63%
FB $104.16 -1.20%
GOOG $746.00 -0.57%


Chart of I:DJI
DOW 17,750.12 -48.37 -0.27%
S&P 500 2,082.89 -7.22 -0.35%
NASDAQ 5,110.5270 -16.9980 -0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs