/// Major Dell Shareholder Urges Other Investors to Abstain in Go-Private Vote

May 31, 2013  |  All Things Digital

Southeastern Asset Management, the investment firm that is the largest outside shareholder in struggling computer maker Dell, today urged other shareholders not to participate in a coming proxy vote over a plan to take the company private. Southeastern owns about 8 percent of Dell’s outstanding equity and has teamed up with activist investor Carl Icahn, who owns a little less than 5 percent, to oppose the $24.4 billion leveraged buyout proposed by CEO Michael Dell and private equity firm Silver Lake Partners. That deal values Dell at $13.65 a share. In an open letter, Southeastern urged shareholders to withhold their votes entirely. This is a key tactic because in the way proxy votes work, a non-vote is essentially equal to a vote against the buyout. Certainly there will be a large number of people who own Dell shares directly who will receive a proxy card in the mail and promptly ignore it. But they don’t matter nearly as much as the large institutional shareholders, like, say, T. Rowe Price, which has previously said it opposes the buyout proposal and which owns about 4 percent of Dell shares. Every non-vote and no vote is going to count. Under the rules of the proxy vote, Michael Dell, who controls about 16 percent of the company’s shares, and other internal shareholders can’t participate in the vote. It’s not close yet, but if more institutional shops come out against the buyout, it could start to look like a contest. Southeastern’s letter came on the same day Dell published its final proxy materials and scheduled the vote on the deal for July 18. Here’s the text of the Southeastern letter

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Major Dell Shareholder Urges Other Investors to Abstain in Go-Private Vote

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