| Dell founder sued by investors |
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Dell Inc founder Michael Dell, the company's board and private- equity partners backing Dell's bid to take the computer maker private were sued in Texas by investors seeking to block the deal. Shareholders, led by a private investor and the Mid- South Iron Workers Pension Fund, said the founder's $ 24.4- billion offer is underpriced when measured against Dell's recent stock buyback program and competing valuations proposed by major stakeholder Carl Icahn, according to the complaint filed yesterday in federal court in Houston. "After his failed management choices led to significant losses for Dell and a resulting decrease in the company's stock price, defendant Michael Dell is now attempting to take advantage of the company's distressed stock price to buy the company on the cheap just as it is starting to experience a turnaround," John Michael Van Buiten, an investor who seeks to represent other shareholders in a class action, said in the complaint. A similar complaint was filed in Delaware Chancery Court in February. Dell and Silver Lake Management LLC's offer of $ 13.65 a share to take the company private represents a 27 per cent discount from the company's 2012 share price, rather than the 25 per cent premium CEO Michael Dell portrays it to be, according to the Texas complaint. Over the last two years, Dell has been aggressively repurchasing stock at an average price of $ 15.25 a share, the investors said. The shareholders also claim the board violated its fiduciary duty by failing to solicit or consider competing bids that didn't allow Michael Dell to " gain a controlling stake in the company and remain as CEO". Dell urges shareholders to vote for CEO's offer Dell Inc urged shareholders on Friday to vote for the $ 24.4- billion buyout offer led by founder and Chief Executive Michael Dell at a special meeting on July 18, saying the bid was superior to other strategic options. Activist investor Carl Icahn and Southeastern Asset Management launched a $ 21- billion counter offer for Dell earlier this month that would allow shareholders to keep their shares. Dells board said in a letter to shareholders that it had looked into the possibility of continuing with or modifying the PC makers business plan, changing its dividend policy, selling to a strategic buyer, and selling or spinning off parts of the business. It did not mention the Icahn offer. REUTERS |
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