DELL, INC.(NASDAQ:DELL) REFUSES TO BUDGE FROM ITS EARLIER PRICE OFFER

Denver, CO, 07/08/2013 (Avauncer.com) – Shares of Dell Inc. (NASDAQ:DELL) plummeted by 2.10% to close at $13.03 in its last trading session, remaining at the upper end of its 52-week range of $8.69 to $14.64. Shares of Dell are currently considered one of the hottest stocks in the market with 53.01 million shares being traded, against a 52-week average volume of 18.05 million shares. This was in the backdrop of reports from the company confirming that Michael Dell and Silver Lake Partners do not wish to raise the price of their $24.4 billion buyout offer. As for the above duo, this offer reflects the company’s fair value. Shares thereby fell as investors became sure that the deal would not go through.

Earlier on, the company said that Hewlett-Packard Co. (HPQ) outperformed Dell and could jeopardize Dell’s efforts to transform into a profitable business by struggling to provide new software and services. In May, Dell posted a 79% decline of its quarterly net income, since the rising popularity of smartphones and tablets led to a decline of the PC industry as a whole. Such buyout offer made by Dell and Silver Lake was thus an effort to go private, so that the company will get poised to better handle its business risks. However, at the same time, Institutional Shareholder Services, a firm engaged in advising shareholders on how to vote on company proxies, is soon expected to release its analysis of the offer, a fact that shall have an effect on the shareholder’s vote scheduled for July 18.

The company was however soft on dissident shareholders such as Southeastern Asset Management and Carl Icahn in such buyout. It was earlier anticipated that Dell would raise the buyout offer price from $13.65 to a higher area, using his own wealth, so that it could counter the offer made by Southeastern Asset Management and Carl Icahn, who has been keeping an eye on the deal to secure a portion of the company remains publicly traded. Mr. Icahn had earlier confirmed that he arrangedto finance Dell for $5 billion.  He seems to be firm on his $14 per share offer saying that hewill continue to hold Dell shares. However, in such a scenario, Mr. Dell has blamed Mr. Icahn that he values Dell at unreasonable levels,approximately twice as much as that of HP, a move thatshall make Mr. Dell’s and Silver Lake’s offer unattractive. Mr. Dell commented that if the deal is turned down, only the shareholders will be exposed to downside risk, which is expected to hit the company in the recent downturn of PC industry.

However, investors seem to hold a negative attitude towards such claims. Activist investor Carl Icahn was reported saying that if the offer is undervalued, implying the company is not that attractive, Mr. Dell and Silver Lake would not have attempted a buyout at first place. It was in this context that share price fell.