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Southeastern Asset: Blackstone Group, Carl Icahn Offers For Dell Are Superior

Southeastern Asset Management Inc said, in a letter to the Special Committee of Dell Inc. (DELL: Quote) Board, that Dell's proxy statement fails to make a case for shareholders to accept the $13.65 per share Michael Dell / Silver Lake buyout offer. Southeastern noted that the Special Committee has obtained two preliminary alternative proposals, both of which it views as superior to the Michael Dell / Silver Lake buyout.

Southeastern viewed that these proposals as superior primarily because each offers shareholders the opportunity to remain owners of Dell while also offering a higher cash price to owners who choose to exit their investment.

Southeastern Asset Management is a beneficial owner of 8.4% of Dell Inc.'s outstanding shares.

Southeastern also added that the proxy statement did not contain any sound reasoning for why, at this stage in the transformation, the Company needs to be taken private.

For shareholders trying to decide whether to support the transaction, the company's suspension of earnings guidance and extremely limited discussion of the Company's future plans will make it difficult to make an informed choice, Southeastern said in the letter.

In the next draft of the proxy, the Special Committee should provide sufficient detail about Mr. Dell's future plans so that public shareholders can properly evaluate their options, Southeastern noted.

Southeastern urged the Special Committee to negotiate and evaluate these alternatives in good faith, and to recognize that offering shareholders a choice is a win / win outcome for all parties.

On Friday, a special committee of Dell Inc.'s board agreed to reimburse billionaire investor Carl Icahn expenses related to a bid for the beleaguered computer maker, only if he agrees to make few commitments in return. In a communique send to the activist investor, the committee agreed to reimburse Icahn the costs tied with bid for Dell if he contractually agrees to not to run a proxy fight, or file a lawsuit or use other tactics to prolong the company's sale.

A consortium led by private-equity giant Blackstone Group L.P. (BX) and Carl Icahn's Icahn Enterprises (IEP) were only two bids that Dell received last month before the 45-day go-shop period concluded. These bids could see its founder, Chairman and CEO Michael Dell lose control of the company, who partnered with Silver Lake Partners to take Dell private in a $24.4 billion deal.

Blackstone-led consortium, including Francisco Partners LP and Insight Venture Partners LP, had offered cash and stock offer in excess of $14.25 per share for a part of Dell in a leveraged recapitalization transaction. Icahn had offered to acquire 58.1 percent of Dell at $15 per share in cash.

by RTT Staff Writer

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