PC maker Dell announced a plan to take itself back to being a privately run company earlier this week, with some financial help from Microsoft, among others. Now it looks like Dell"s leveraged buyout plan might gain some opposition from a number of large shareholders who feel the asking price is too low.
Reuters reports that Southeastern Asset Management sent a letter discussing their issues with the leveraged buyout, which would put a price of $13.65 per share of Dell"s stock. Southeastern Asset Management, which owns about 8.5 percent of Dell, said in the letter that it believes the per share price should instead be $24.
The same report claims that three other investors – Harris Associates, Yacktman Asset Management and Pzena Investment Management – all plan to oppose the current deal. Together, the three firms own another 3.3 percent of Dell. So far, Dell has not indicated any plans to raise their per share offer.
If the current plan goes through, it will take about $24 billion for Dell to go private, which will include a $2 billion loan from Microsoft. Dell founder and CEO Michael Dell will put in $500 million of his own money in the deal and another $250 million via his investment company. Dell has until Nov. 5 to back out of the deal if they choose to do so.
Source: Reuters | Image via Dell