Dell to Open Investor List to Southeastern Amid LBO Dispute

Dell Inc. agreed to provide investor information to Southeastern Asset Management Inc., its largest outside shareholder and one of the most vocal opponents of a planned $24.4 billion buyout.

Acting on behalf of its $7.7 billion Longleaf Partners Fund, Southeastern sought access last week to a list of investors to discuss the deal. Dell will make the information available, pending a confidentiality agreement, according to a filing yesterday with the U.S. Securities and Exchange Commission.

The fund joins billionaire Carl Icahn in inspecting confidential Dell information, seeking to step up pressure on the company to find an alternative to a proposed buyout by founder Michael Dell and Silver Lake Management LLC. Southeastern and T. Rowe Price Group Inc., the second-biggest outside shareholder, say Dell is undervalued by the $13.65-a-share agreement to be taken private.

The board is seeking bids under a so-called go-shop period that lasts through March 22, and the deal requires approval from a majority of shareholders excluding CEO Dell.

Dell fell less than 1 percent to $14.30 at the close in New York, leaving them 4.8 percent higher than the offer price.

The computer maker denied a request for financial information from Cavan Partners LP that was sent on the letterhead of the Shareholder Forum, Dell said in the filing.

Proxy Statement

David Frink, a spokesman for Round Rock, Texas-based Dell, said that the company isn’t required to comply with the request for all communication between advisers and the company or a committee of its board. Dell plans to disclose more information about its financial performance and projections, as well as efforts to find a buyer, by the end of March.

“It surprised me that they seemed to object to what people would consider the obvious logic of investors having access to the same information that insiders used to make a proposal,” Gary Lutin, who filed the request for information and is chairman of the Shareholder Forum, said in a telephone interview yesterday. “We actually deliberately specified the information requirements to be exactly the same as what they provided to their own valuation experts.”

The Shareholder Forum acts as an independent moderator and doesn’t own Dell securities, Lutin said. Dell shareholder Cavan Partners, a hedge fund, gave the Shareholder Forum authority to write the letter.

Lutin responded to the issues raised by Dell as grounds for its refusal, and reiterated the Shareholder Forum’s request for information today.

Independent Decisions

“What concerns us is the need for each of Dell’s stockholders to make its own independent decisions about its own individual interest, and that is not something that board members can or should be doing for them,” Lutin wrote in a letter to Dell posted on the group’s website.

Icahn has amassed a stake in Dell and is pushing the company to pay a $9 a share special dividend.

The buyers could boost the offer to $15 a share and still pay the cheapest multiple among large technology buyouts. At least five analysts see the buyout group increasing the bid to as much as $14.90 to $15 a share. At $15, Dell still would be going private at about 5.4 times profit, the lowest multiple for a technology buyout larger than $1 billion, according to data compiled by Bloomberg.

(Updates with Shareholder Forum letter in 10th paragraph.)
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