market folly

Mason Hawkins' firm Southeastern Asset Management has filed a 13D with the SEC on shares of Dell (DELL), indicating that they will use 'all options' to oppose the deal to take the company private, including a proxy fight, litigation claims, Delaware courts, etc.

Founder Michael Dell and Silver Lake Partners have bid to take the company private at a level that Southeastern says is well below intrinsic value of the company.  The deal is for $13.65 per share while Hawkins values the company around $24 per share. 

Southeastern is Dell's largest institutional shareholder as they own 8.5% of the company.  They feel a recapitalization of the company is a much better option.


Other Shareholders Support Southeastern

Reuters has reported that other institutional shareholders are opposed to the deal as well, including Harris Associates LP, Yacktman Asset Management LP, and Pzena Investment Management.  Those three managers collectively own 3.3% of the company.  Pzena's chairman, Richard Pzena, feels a deal should be in the $20 per share arena. 

All told, approximately 11.8% of the company's shareholders seem to oppose the deal (at least publicly).  It will be interesting to see how this plays out.

Embedded below is Southeastern's letter to Dell's board of directors:




You can download a .pdf copy here.