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Dell Computer Corporation (DELL) Message Board

  • sexylawgirl1 sexylawgirl1 Feb 21, 2013 10:58 AM Flag

    Shareholders, Shake Off Your Apathy And Vote To Stop Tom Ward And Michael Dell From Screwing You

    Southeastern Asset Management (SAM) led by CEO Mason Hawkins hold around 8.5% of Dell shares outstanding has been the most vociferous in protesting the proposed $13.65 per share offer that Michael Dell has proposed in his bid to take the company private in a leveraged buyout transaction led by private equity firm Silver Lake Partners. On their website SAM lays out an excellent model that values Dell at a little under $24 per share……and it is very conservative. For example it values at cost or $7.58 per share all acquisitions Dell has made since 2008 despite Dell CFO Brian Gladden announcing these new additions in aggregate had delivered 15% internal rate of return. The PC business, admittedly in decline was scored at $2.78 per share. Lenovo, primarily a PC company is valued on a relative basis using the same valuation metrics trades at over three times the Dell allocated value. At an investment conference in summer of 2012 Dell announced that operating cash flow was expected to increase by 2014 from $4 to $6 billion…..hardly a company in decline. Dell has successfully transformed itself from a PC firm to an IT company and now Michael Dell wants to reap the benefits for himself and a few partners. Rather than rewarding patient, long term shareholders such as SAM, Mr. Dell and his partners seek to capture all future upside for themselves. Once again it’s not against the law, but certainly it violates the spirit of corporate directors acting as shareholder fiduciaries. The board has instituted a 45 day “go shop” period, theoretically looking for better offers. It begs credulity to suggest this is anything more than a pro-forma “cover your butt” move by the board. Think about what a joke this really is. Michael Dell has been working on this deal since at least last summer that we know about. So how realistic is it that Sir Lancelot, the outsider, is going to ride in on his big white stallion and trump the deal on the table with only a month to perform due diligence…….the odds are slightly less than 0. The deal appears so egregious that it just might get stopped. T. Rowe Price chairman Brian Rogers has announced his funds will vote their 4.4% stake against the deal. With Michael Dell recusing himself from voting his roughly 15%, shareholders must eclipse over 50% of remaining shares or 42.5% of total outstanding shares -Forbes 2/21

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