Accounting & Investing Info for San Antonio A & M
Tuesday Feb 12 2013
Dell's largest shareholder opposes the $13.65 buyout. Please read this article. A proxy is the right to vote someone else's shares. Buyouts or take overs often feature a battle for proxies.Each side may take out whole page ads in major newspapers explaining why they are right and why you should vote with them.
Southeastern Asset wants $24 a share. No doubt they see this as an attempt tp buy Dell on the cheap after exisitng shareholders have waited years for a turn around.
According to this article; Southeastern owns “147.3 million shares of Dell” @ 13.65 a share that equates to just over $2 billion. Although they claim their 147.3 million shares are worth $24 per. That equates to 3.5 billion. Yeah I think I would go to war over a potential 1.5 billion loss too. What i’m not completley understanding is how did Southeastern determine the shares were worth $24 per.
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David
Excellent question, that is about half the average of the former highs at 50 and 42, and that makes it as good a guess as any I suppose. And if another hedge fund is willing to jump in at 13.65, they surely smell something is wrong. Typically buy outs happen at higher prices than where the stock is trading now.
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So the value of $24 per share was a guess? I assumed they’d have some formula or calculation to determine that amount.
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All valuations are guesses, I am sure T Rowe Price has a fancy discounted cash flow mode. but 24 is half way between 5and 50, the fifteen year range for Dell, and they want a higher price, my eyeball model of the chart gives the same result.
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And why wouldn’t T Rowe want a higher price? They also stand to lose a substansial amount of money if the 13.65 price goes through. Thank you for the clarification.
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Professor Elam 
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