T. Rowe Price Group Inc. (TROW) said it won't support Michael
Dell's proposal to take Dell Inc. (DELL) private at the current
offer price.
"We believe the proposed buyout does not reflect the value of
Dell and we do not intend to support the offer as put forward,"
Brian Rogers, T. Rowe Price's chairman and chief investment
officer, said in a statement.
A spokesman for Dell declined to comment.
T. Rowe joins other large institutional shareholders of Dell,
including Southeastern Asset Management, in stating their
opposition to the buyout at the proposed price, arguing that it
doesn't place a high enough value on the company.
Dell said last week it had accepted an offer from Mr. Dell, who
is Dell's founder and chief executive, and private-equity firm
Silver Lake Partners, to pay $13.65 a share to take the
personal-computer maker private. The group said the price
represented a 25% premium to Dell's stock price before news of the
potential buyout emerged.
Under the terms of the deal, Dell has 45 days to seek another
bidder, and the offer is subject to approval by Dell's
shareholders. A majority of shareholders must approve the deal,
excluding Mr. Dell and other company insiders, who collectively own
about 16% of Dell's shares.
T. Rowe owned 4.41% of Dell's shares outstanding as of the end
of the third quarter, according to FactSet. Southeastern in a
filing on Tuesday said it currently owns 8.4% of Dell's outstanding
shares.
Dell shares on Tuesday were up 0.8% to $13.81 at midday, above
the offer price.
Analysts at Jefferies in a note published Tuesday said they
believe the bid "could be raised to $15 to satisfy agitated
shareholders." That could still provide an acceptable return to the
private-equity buyers, they said.
"Our conversations with investors lead us to believe that most
want a raised bid, but that they are also cognizant of the lack of
competing bidders and of the secular headwinds facing Dell's PC
business," the analysts wrote.
Write to Telis Demos at telis.demos@wsj.com and David Benoit at
david.benoit@wsj.com
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