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Rating:Can Longleaf and T. Rowe Stop the Dell Deal? Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, February 25, 2013

Can Longleaf and T. Rowe Stop the Dell Deal?

News summary by MFWire's editors

Longleaf and T. Rowe Price both have a lot at stake in the ongoing battle to take Dell private, but according to Chuck Jaffe of MarketWatch, the two mutual fund shops may not be able to do much to stop the deal.

Jaffe notes that company founder Michael Dell is leading a group that wants to buy the company back from investors for more than $24 billion. While the amount seems enormous, the truth is that a share price in the $13 range is a disappointment for investors who thought the stock was undervalued at recent prices.

That would include the money managers at Southeastern Asset Management, which runs the Longleaf Partners funds. Jaffe writes that Longleaf largely paid more than the buyout price for Dell shares while amassing the largest independent stake in the company. In a recent filing with the U.S. Securities and Exchange Commission, Longleaf managers said that they think the value for the entire company should be closer to $24 per share. They own roughly 8.5 percent of Dell's voting shares.

T. Rowe is another mutual fund manager with big stakes in Dell. Indeed, some pundits say that funds will have no choice but to get more involved in buyout deals in order to meet investor pressure for better returns.

One big problem, Dell himself owns more stock than that owned by Longleaf and T. Rowe combined.

To learn more, read Jaffe's article

Edited by: Tommy Fernandez

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