Dell Computer Goes Private But Faces Obstacles

In the upcoming months, pending approval from the shareholders, Dell, Inc., computer manufacturer, will become a privately held company.  From its first IPO (Initial Public Offering) back in June 22, 1998, Dell has been a publicly traded company on the NYSE, recently closing with a market capitalization of 23.68 billion.  The privatization of the struggling computer company is based around a 24.4 billion dollar deal with Microsoft being a key player in the leveraged buyout.  If this buyout is approved, control of the company would fall back into the hands of Michael Dell, along with investment firm Silver Lake, another key player in the transaction.  Much of the financial sector believes that Dell would benefit from this privatization, allowing for a more nimble company in the ever changing field of technology.

On February 8th, 2013, Dell’s largest stockholder, aside from company founder and CEO Michael Dell, Southeastern Asset Management Company, Inc. publicly stated that the $13.65 per share evaluation underlying the buyout is “woefully inadequate”, contending that Dell shares are worth, at a minimum, $24 per share.  Mason Hawkins, Southeastern’s CEO, anticipates voting against the landmark buyout, unless a new evaluation of the company is proposed.  Southern Assets holds an 8.5 percent interest in Dell, and could cease the buyout if their approval is withheld.

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