Southeastern Asset Management Challenges Buyout at Dell Harvard Case Solution & Analysis

In late 2012, Michael Dell needs to take Dell Inc., the business he founded, private. Mr. Dell considers that the successful business's transformation from a personal computer (PC) maker to a business solutions and services supplier (ESS) is dependent on going private without the short term results inspection public companies face. The deal requires the vote of a majority of shareholders. Southeastern Asset Management, an investment firm, and Dell Inc.'s second largest investor behind Mr. Dell firmly oppose the deal because the offer is well below what Southeastern believes is Dell Inc. intrinsic value.

The southeastern, together with investor such as Carl Icahn, instigate a campaign to conquer the go-private deal and propose a leveraged recapitalization alternatively. On several occasions it seems that the deal will probably be voted down by shareholders, but rule changes made by Dell Inc.'s Board eventually pave the way for Mr. Dell to take the eponymous company private-for a price only slightly higher than the first bid. The case scenario details the specific reasons why Mr. Dell is required to take Dell Inc. private, why the Southeastern and Icahn reject the deal, the specific points of both Dell/Silver Lake bid and of Southeastern's/Icahn's leveraged re-capitalization proposals, and the events that occurred.

Southeastern Asset Management Challenges Buyout at Dell case study solution

PUBLICATION DATE: June 09, 2014 PRODUCT #: 114015-HCB-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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