Dell’s Special Committee Recommends Buyout

Dell’s Special Committee Recommends Buyout
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Dell Inc. (NASDAQ:DELL) has announced that its special committee has unanimously decided that the proposed leveraged buyout is the best thing for shareholders. The decision comes just a day after Southeastern Asset Management, one of Dell’s largest outside shareholders, demanded that the company turn over its list of shareholders and reiterated its opposition to the buyout.

Dell's Special Committee Recommends Buyout

In a press release, Dell Inc. (NASDAQ:DELL) said its special committee consists “solely of independent directors” who are working with the company’s “independent legal and financial advisors.” The process took over five months to complete, and the committee examined the risks, opportunities and strategic alternatives.

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The committee recommends that Dell Inc. (NASDAQ:DELL) be sold at a value of $13.65 per share, which is slightly less than the price of the stock at this time. According to the statement, the committee said the valuation is a 37 percent premium above the average price for the three months before rumours about the buyout were first reported.

In addition, the committee reportedly insisted on a few additional provisions “to protect and maximize value for shareholders.” Those provisions include a low break-up fee and a go-shop process with a fee structure that pushes the company’s financial advisor Evercore Partners Inc. (NYSE:EVR) to locate a better deal if possible.

Evercore is currently soliciting additional proposals and will continue to do that until March 22. Dell said it will continue to negotiate after that date if a deal that’s potentially better than the current buyout offer surfaces. The committee also insisted that majority outside shareholders must approve the buyout before it will occur.

Southeastern Asset Management has already said it would vote against the buyout, and the fact that it’s taking steps to communicate more clearly with other shareholders could mean that it’s pushing other shareholders to vote against the buyout as well.

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