Why doesn't Michael Dell increase the offer to $14?
I have run many stock price valuation models in the past.
The difference between $14 and $13.75 is only 1.82%.
This 1.82% is much below the margin of error of ANY stock price valuation model. I don't know what model Silver Lake is using but these guys must be smoking pipes.
For those of you who have purchases real estate before. Let me ask you this. If you see a house that you REALLY LIKE, and you have offered to buy the house for $500,000. The seller tells you that you are not going to get it unless you increase the offer to $510,000. Will you increase the offer or just walk away?
For 90% of the sane population, I would say they will increase the offer by that 2%.
As for Michael Dell, the more I think about it, he is either a rich idiot or a cheap genius.
$375 million to be exact. However, you have not considered the followings:
1. Silver Lake has shared in the $150 million increased cost to $13.75. They should, and may, share part of the $375 million.
2. Michael Dell has a net worth of approx. $15 billion. The whole $375 million difference to him is "chump change".
Michael Dell won't be able to spend more than 10% of this net worth even he tries to, for the rest of his life. After he dies, the only thing that matters (to him) should be his legacy. $375 million for legacy seems to be a good deal to me.