A surprising move this month by business leaders at Dell Inc. this month have investors a little on edge after the computer maker announced that it had accepted a bid from Dell's founder and chief executive Michael Dell, and a private equity firm which would ultimately make the PC maker privately owned.
Big name investors like T. Rowe Price and Southeastern Asset Management have already voiced their opposition to the buyout pointing out that the bid of $13.65 is well below current market prices and "does not reflect the value of Dell."
Of course, as per the terms of the deal, Dell has 45 days to seek another bidder and the offer will be subject to approval by Dell's shareholders. This could be little comfort though to T. Rowe Price who currently owns a 4.4 percent stake in the company. The situation appears to be the same for Southeastern Asset Management who reportedly owns 8.4 percent of Dell's shares.
Decisions like this are difficult for not only business owners but for investors too. Owners want to make a clean sale while investors want to make sure that they are getting a fair price for their stock in the company. As many Texas business owners are aware, although negotiations may be necessary, this may not happen every time which can lead to charged situations that may require legal representation to hash out any lingering details.
As for the situation with Dell, at current pace, financial experts are estimating that the bid could be elevated to $15 a share to appease agitated investors. At this point, only time will tell what will be decided in the end.
Source: The Wall Street Journal, "T. Rowe Price Opposes Dell Buyout," Telis Demos and David Benoit, Feb. 12, 2013