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Dell Computer Corporation (DELL) Message Board

  • chicadee75 chicadee75 Mar 31, 2013 6:00 PM Flag


    In the Dell situation, Barron’s this week points out that one firm, one that apparently initially paid much higher prices for some of the shares it owns above $20 per share, is insisting that even if you only value the PC business at $2.78 per share, they constructed a sum of the parts value for Dell at $23.72 per share. In the Dell case, the original firm that broached the idea of going private with Michael Dell last summer was frozen out of the deal. In the literally 1000 pages of documents filed in the proxy statement, Mr. Dell told Southeastern Asset Management that he would consider the idea. He surely did but used their concept to proceed with Silver Lake Partners and not Southeastern. This is the big leagues and when it comes to doing what is best for MOI, Mr. Dell chose to take Southeastern’s concept and rework it to suit himself, leaving them out in the process. Barron’s suggests that with Carl Icahn and Blackstone Group now in the bidding the plot has thickened a bit. You can regard the Blackstone offer as the Trojan Horse bid as the recently departed head of Dell’s acquisition strategy is now at Blackstone and spearheading that effort. He knows what is there to buy better than most.

    Barron’s cover story this week suggests that Michael Dell and friends aren’t likely to be able to steal the company at $13.65. That’s close to half its estimated present value with little included for the crumbling PC business. On the other hand, it is noteworthy that none of the other offers rise to a price consideration that is much higher than the $13.65. Besides all those massive fees that the deal machinery on Wall Street stand to make over this particular one, the bidding investors must see still see a sizeable return to make it worth their interest. Whether Micheal Dell has the skills or not to lead the company going forward also remains to be seen. Nothing he’s done in recent years has provided the magic formula which is why we are at this particular Dell crossroads.

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