There will be no bargain price for this Dell.
The proposed buyout by Michael Dell of his namesake company for $13.65 a share is likely not going to get approved, a leading Dell shareholder said yesterday.
“I would put a high probability on it not getting through at this price,” Donald Yacktman, who owns 14.9 million shares, or slightly less than 1 percent of the PC maker, told The Post.
But even a bump to above $14 may not do it, he said.
“I think [at that price] there would be a higher probability [of it getting approved]; the question is, would it be high enough to get through,” he said.
The disappointing news for Dell and Silver Lake Partners, partners in the $24 billion buyout, comes as support for the mega-deal is losing steam.
The company’s second-largest shareholder — not counting the 47-year-old Dell, who can’t vote on the deal — T. Rowe Price, said yesterday it did not support the deal.
Southeastern Asset Management, the largest shareholder after Dell, has already said it believes the business is worth nearly $24 a share. It revealed in a filing yesterday that it hired proxy solicitor D.F. King to help oppose the offer.
For the merger to be approved, a majority of the voted shares must approve it.
Non-votes are considered to oppose the deal.
Yacktman, like Southeastern Asset Management, wants to see a change in the entire structure of the deal. He said he wants to leave some of his shares invested in a Dell stub that would still be listed on the stock exchange.
(That is, he even prefers Dell paying him $12 each for his shares but letting him roll over some of his stake than the current offer.)
Michael Dell might object to any arrangement under which he needs to share control over a privatized Dell with the listed company’s board.
Recent history indicates the company’s leading shareholders have reason to suspect they are leaving money on the table by selling to the Dell-led group.
The most successful mega-deals of the 2005-08 buyout boom were those in which company founders led the deals, like Richard Kinder in Kinder Morgan and the Frist family in HCA.
On the other hand, buyout firms lost — and investors likely sold at the right time — in most of the other mega-deals, including those for Caesars Entertainment and utility Energy Future Holdings.
Meanwhile, a source said Dell is rapidly losing employees, at least in Massachusetts, likely in anticipation of a transformative deal.
A Dell spokesman did not return a call for comment.