Southeastern Asset Management, the hedge fund managed by Mason Hawkins who expressed strong opposition on Dell Inc. (NASDAQ:DELL)’s agreement to sell the company to a consortium of buyers for $24.4 billion, considered to partner with another player to offer a counter bid, according to report from the Wall Street Journal citing unnamed sources with knowledge about the issue.
According to sources, Southeastern Asset Management considered several options as it fights the transaction and encourage its fellow shareholders to reject the proposal of Michael Dell, founder and CEO of Dell Inc. (NASDAQ:DELL) and private equity firms Silver Lake Partners and MSD Capital.
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The report also cited that Southeastern Asset Management considered the option of rolling Dell’s shares into the deal along with the 15 percent stake committed by the CEO of the computer maker. If the Southeastern decides to make such move, it would be favourable for the hedge fund. However, such has been criticized by the hedge fund as too favourable for Michael Dell. According to the Wall Street Journal, it is unclear whether Southeastern Asset Management is actually considering these options.
In a letter to the board of directors of Dell Inc. (NASDAQ:DELL), Hawkins said his firm would endorse a “go-private type sale where current shareholders could elect to continue to participate in a new company” that had a publicly traded portion.
He also urged the board of the company to review all alternatives to provide maximum value to shareholders. He pointed out that the proposal of consortium is an effort to purchase Dell at a substantial discount to intrinsic value at the expense of shareholders. He believed that Dell’s valuation is around $24 per share.
Southeastern Asset Management is determined to fight Dell’s buyout agreement. Last month, the firm hired D.F. King & Co., leading proxy solicitation and corporate/communications firm with expertise in proxy fights and tender/exchange offers for corporate control to provide certain consulting and related services. The hedge fund also retained the services of Dennis J. Block, an experienced lawyer in mergers and acquisitions.