Southeastern has said it is pleased that the alternative proposals submitted to the special committee are structured to give shareholders the opportunity to continue to participate in the company, while also providing a higher cash component for shareholders who choose to exit.

One reason Dell shares, at $14.27 on Friday, March 28, are not trading much above the Blackstone offer is there is a fear that Dell will participate with Blackstone and undercut any bidding war, an arb said. There is little thought that the Carl Icahn offer will be in the final running.

The 16% of Dell shares rolling over into the Silver Lake buyout that are represented by Michael Dell and insiders must, under the Silver Lake agreement, be voted in proportion to other shareholders if the Dell board recommends an alternative transaction. In addition, the Michael Dell shareholders must work in good faith with alternative bidders if requested by the special committee, which some observers of the situation assume has become the case.

The situation will not play out for another three to five weeks, a source said. Silver Lake has only one matching right, which could be an advantage to Blackstone. The firm's offer is designed to ensure the bid was considered viable and an excluded party under the go-shop so further negotiation could occur. Blackstone could firm up the offer on the low end -- perhaps pennies over its indicated interest -- to get Silver Lake to make a best and final bid.

In the end, the deal looked like it would play out between $14.50 and $14.75 or not at all, and that still seems to be the case, an arb said.

-- Written by Scott Stuart in New York.

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