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Oakmark sell Dell stake after Blackstone drops bid

Steve Rothwell, Business Writer

The Oakmark Funds, a large holder of Dell stock, has sold its stake in the PC maker after Blackstone withdrew its bid for the company.

Buyout specialist Blackstone, which had offered $14.25 per share to acquire Dell, dropped its bid last Friday, citing concern over the accelerating decline in PC sales.

Worldwide PC shipments plunged by 14 percent in the first three months of the year, according to IDC. That's the steepest quarterly decline during the 19 years that the research firm has been tracking the market. The report was published after the buyout firm had tabled its bid.

The Blackstone offer for Dell was higher than the one made by a group led by the company's founder Michael Dell, which was willing to pay $13.65 per share, in a deal that would take the Round Rock, Texas, company private.

Oakmark said that, by its calculations, the company was worth more than what Michael Dell had offered but, it had been spooked by Blackstone's decision to withdraw its offer. The investment company said that the former head of Dell's mergers and acquisitions team works at Blackstone, giving the private equity firm better information about the business outlook for the PC maker.

"We believed Blackstone had an information advantage compared to other potential bidders," William C. Nygren, a portfolio manager, said in a statement on Oakmark's website. "At Oakmark, we have always paid extra attention to the actions of investors who have access to information public investors don't have."

Oakmark will invest the proceeds of its sale of Dell stock in other stocks that it regards as undervalued, Nygren said. Dell stock accounted for about 2.1 percent of the investment firm's total net assets.

Dell closed up 21 cents, or 1.6 percent, at $13.30 in trading on Wednesday. Despite falling after Blackstone dropped its bid, the company's stock is still up 32 percent this year.