Dell investors do not approve of the $24 billion buyout deal and are ready to fight the company about it, reports Fox Business.
Dell has announced that it has been in talks about a $24 billion deal where the company goes private. However, according to recent reports, a large investor in the company, Southeastern Asset Management, disapproves of the deal and is ready to fight the company regarding this.
Southeastern has sent a letter to Dell expressing its disappointment and is ready to "explore all available options", according to a Reuters report.
The Southeastern Asset Management Company has a 8.5 per cent share in Dell. The company believes that the $13.65 pricing for each share is too low, according to Reuters
The deal stated that all common stock holders will receive $13.65 in cash for each share of Dell they own. This is a 25 percent premium from the Dell's closing price of $10.88 on Jan. 11. The deal will also receive a $2 billion loan from Microsoft Corp. as backup finance.
"I believe this transaction will open an exciting new chapter for Dell, our customers and team members," Michael Dell said in a statement. "We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise."
Michael Dell currently owns 14 percent of the company's shares and will remain Chairman and CEO of the company even after the new terms are implemented. An email that was sent out to all employees of the company stating that the deal will still take "time, investment and patience" to come through. The deal is yet to receive the approval of its stock holders, which, according to Sterne Agee analyst Shaw Wu, may not happen because "there's practically no premium."
After this, Dell will have another hurdle to cross - pushing its new business initiatives in a brutally competitive marketplace.
"Dell has a very tough road ahead," Hewlett Packard said in its statement. "The company faces an extended period of uncertainty and transition that will not be good for its customers. And with a significant debt load, Dell's ability to invest in new products and services will be extremely limited."
