Dell Inc. (NASDAQ:DELL) eyeing on the buyout offer
The struggling PC maker, Dell Inc. (NASDAQ:DELL) had recently been considering the offer from its Chief Executive Officer, Michael Dell to buyout the company in a deal of $24.4 billion, which would pay $13.65 per share outstanding to the shareholders of the company. A special shareholders meeting is scheduled on July 18, 2013. Michael Dell, who founded the company in 1984 with $1000, while he was attending the University of Texas now holds 15.6 percent stake in the PC maker.
The founder now wants to take the company into private holding so that he could make the struggling PC maker to compete effectively in the tablets and cloud computing markets. Michael Dell had agreed to finance part of the buyout deal with $750 million, of which he would directly contribute $500 million and the remaining $250 million would be financed from the sister firm of the founder, the Silver Lake Management LLC. This move by the founder and Chief Executive Officer of Dell Inc. (NASDAQ:DELL) presents his perspective of bringing in other investors into the company.
However, this entire proposal b y Michael Dell to buyout Dell Inc. (NASDAQ:DELL) is completely being opposed by a team of Carl Icahn and South Eastern Asset Management Inc. who are formally urging the shareholders of Dell Inc. (NASDAQ:DELL) to completely reject the offer from Michael Dell and Silver Lake Management LLC. South Eastern Asset Management Inc. is the biggest independent shareholder in Dell Inc. (NASDAQ:DELL) and had now paired with Carl Icahn to propose an alternative to the buyout offer from Michael Dell. According to this alternative plan, the shareholders of Dell Inc. (NASDAQ:DELL) would be allowed to keep their shares in the company and would be paid an additional $12 in cash or as additional shares.
Dell Inc. (NASDAQ:DELL) presently faces intense competition from other major players like Hewlett Packard Company (NYSE:HPQ) which had managed to keep up its market share in the personal computers through the company’s effective play in tablets and notebook devices. The company presently holds 1.94 billion shares outstanding with an institutional ownership of 77 percent.