Biggest Dell Holder Has High Opinion of Value: Chart of the Day

Dell Inc.’s biggest outside shareholder sees far more value in the world’s third-largest maker of personal computers than others do.

Southeastern Asset Management Inc. said in a letter to Dell’s board last week that the company is worth at least $24 a share. The estimate followed a $24.4 billion buyout offer from Michael Dell, the company’s founder and chief executive, and Silver Lake Management LLC, a private-equity firm.

As the CHART OF THE DAY illustrates, the value that the Memphis, Tennessee-based firm sees in Dell is higher than the stock’s price since September 2008. It’s also well above three other per-share figures associated with the proposed buyout:

-- $13.65 a share, the value of the offer made by Michael Dell and Silver Lake. Dell’s stock closed above that price for the past two days. The performance raises the possibility of a higher bid for the company, based in the Austin, Texas, suburb of Round Rock.

-- $15 a share, an estimate of how high the offer may be raised. Peter Misek, an analyst at Jefferies & Co. in New York, cited the figure in a report yesterday. Misek derived the price from projected returns on the deal. At $17 a share or more, the returns would be too low for the buyout to proceed, he wrote.

-- $16.38 a share, an estimate of Dell’s value by Aswath Damodaran, a finance professor at New York University who has written books on valuation. Damodaran cited the figure in a posting yesterday on his Musings on Markets blog.

T. Rowe Price Group Inc., Dell’s second-largest outside investor, came out against the deal yesterday in a statement that said the buyout offer was too low. The Baltimore-based firm didn’t disclose its estimate of the company’s value.

To contact the reporter on this story: David Wilson in New York at

To contact the editor responsible for this story: Chris Nagi at

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.