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Friday, 15 February 2013 12:48

Dell admits cutting the value of his stock

Written by Nick Farrell



Two percent below what he offered shareholders

Michael Dell has admitted that in a bid to clinch a $24.4 billion deal to take the Dell private, he agreed to value his 16 percent stake in the company at about 2 percent below the price offered to other shareholders.

The founder told his board in August of his intention to remove the struggling company from Wall Street's scrutiny. According to official filings, Dell agreed that his equity stake would be valued at $13.36 a share, versus the $13.65 offered eventually. Dell revealed that the private equity firm raised its proposed offer price at least once during ensuing discussions.

"To facilitate a price increase by Silver Lake, Dell and related persons agreed that their shares to be rolled over in the proposed transaction would be valued only at $13.36 per share as opposed to the $13.65 price offered to the company's unaffiliated stockholders," the filing read.

The proposed leveraged buyout, the largest private-equity backed deal since the financial crisis, is being led by Michael Dell and Silver Lake, and pits Dell's board against two shareholders, Southeastern Asset Management and T. Rowe Price. The deal is up for a shareholder vote around June or July and it will need a majority of shareholders, excluding Michael Dell, to be approved.

Nick Farrell

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