Southeastern Issues Comment on Latest Dell Bid: Says Dell Paying With His Own Money is 'Not New Value,' Sees Offer Undervaluing Co.
Southeastern Asset Management today issued the following statement in response to the announcement by the Special Committee of the Board of Dell Inc. (NASDAQ: DELL) that it has accepted a revised Michael Dell / Silver Lake offer:
We are extremely disappointed that the Special Committee has agreed to the revised merger agreement. The justification being made for this decision is the characterization of special dividends to be paid to Dell stockholders as "increased value." In fact, the Special Committee has traded away what was perhaps the most important "unwaivable" stockholder protection included in the Michael Dell/Silver Lake freeze-out transaction without extracting comparable new value.
The Special Committee has simply agreed to a modest distribution of company cash – in the form of a regularly scheduled dividend and a special dividend funded by the ongoing operations of the business – cash that would continue to be owned by stockholders if Dell were to remain a public company. We think that paying stockholders with their own money is financial engineering, NOT new value.
The Special Committee further tilts the playing field in its Chairman's favor by drastically extending the record date. In addition, Alex Mandl, Chairman of the Special Committee, today stated that the change to the voting standard was justified because of the emergence of an alternative to the Michael Dell/Silver Lake proposal. We are amazed at this justification. The Special Committee is using our alternative proposal, which they have not meaningfully pursued despite the opportunity to create a better outcome for all stockholders, to justify lowering the voting requirement for Michael Dell and Silver Lake.
The Special Committee is also giving Michael Dell and Silver Lake a significant advantage by scheduling the Special Meeting well in advance of the Annual Meeting. If the Special Committee's intention was to allow stockholders to express their views between two alternatives, why wouldn't it hold the Special Meeting and Annual Meeting together? As we have stated for months, the Dell 2013 Annual Meeting of Stockholders and the Special Meeting should be held concurrently, so that Dell stockholders are given a real choice.
Stockholders should ask why the Special Committee is acting as though its mandate is to get this deal done at any cost necessary when the transaction is so stockholder unfriendly that it could not receive the required stockholder approval on three occasions.
We continue to believe that the Michael Dell/Silver Lake freeze-out transaction drastically undervalues the company and its prospects and denies stockholders the opportunity to participate in Dell's significant upside potential.
Southeastern continues to recommend that its fellow Dell stockholders vote the GOLD proxy card (1) "AGAINST" the Merger Agreement proposal, (2) "AGAINST" the Golden Parachute proposal, and (3) "AGAINST" the Adjournment proposal.
Whether or not you plan to attend the Special Meeting, you are urged to follow the instructions on the GOLD proxy card or voting instruction form to vote by Internet or telephone, or sign, mark and date the GOLD proxy card and return it in the postage-paid envelope provided. Your latest-dated proxy is the only one that counts, so you may return the GOLD proxy card even if you have already delivered another proxy. Please do not return any proxy card sent to you by Dell. If you have already returned a proxy card sent to you by Dell, that card will be automatically revoked if you complete and return the enclosed GOLD proxy card.
If stockholders have any questions concerning the Proxy Statement filed by Carl C. Icahn and Southeastern Asset Management or would like additional copies, please contact D.F. King & Co., Inc. at 1-800-347-4750 or firstname.lastname@example.org.
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