Special Committee Maintains Dell Buyout Proposal Is Best Option


A special committee of Dell's board of directors has ruled that the proposed $24.4 billion buyout of the company for $13.65 per share is the best option for stockholders.

"The special committee unanimously determined that the sale of the company would be the best alternative for stockholders. 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 percent premium above the average price for the 90 days before rumors regarding the transaction surfaced," the committee wrote in a statement.

The committee, which consists of independent directors, said it spent five months reviewing opportunities for Dell, including a leveraged recapitalization, changing the dividend policy and potentially selling all or parts of the business.

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

The "go-shop" period ends March 22 and Dell, Round Rock, Texas, will continue negotiations past that date if a better proposal emerges, the committee said in the 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 committee wrote.

That's where Dell may run into problems. Its biggest outside shareholder, Southeastern Asset Management, which holds 8 percent of Dell's shares, wrote the board a second letter Tuesday saying it opposes the $13.65 per share offer and wants Dell to provide the names of other shareholders in order to communicate with them.

Other investors, including T. Rowe Price, also have expressed concerns about the proposed go-private transaction, which is led by Silver Lake Partners and others including Michael Dell and Microsoft, which has promised a loan of up to $2 billion to Dell.

PUBLISHED MARCH 6, 2013