Mon February 11, 2013
Dell Keeps Pushing for Buyout
Round Rock-based Dell is defending its decision to go private, despite growing concerns from some major shareholders.
Dell issued a statement today reasserting that taking the computer maker private is the best move for the company. "In the course of its deliberations, the Special Committee of Dell’s Board considered an array of strategic alternatives," the statement reads. "The Board concluded that the proposed all-cash transaction is in the best interests of stockholders."
Earlier this month, Dell's founder and CEO Michael Dell announced a buyback program: stockholders would be paid $13.65 dollars per share to give up their stake. But some shareholders have balked at the offer, saying that the price is too low.
John Doggett, a business school professor at the University of Texas, says privatizing Dell won’t necessarily save the company. He says Dell needs to make products that consumers want.
"All they care about is: does Dell have something that they need and want at a price that’s competitive," said Doggett. "The case has not been made to me why a strategy that would work if Dell was private would not work if Dell was public."
Southeastern Asset Management, which owns 8.5 percent of Dell’s stock, has threatened to derail the deal. They say that the company is worth closer to $24 dollars per share.
Dell employs about 14,000 people in Central Texas.