Southeastern Asset Management (SAM), the largest shareholder of Dell outside of the company's founder, Michael Dell, is complaining about the leveraged buyout deal that was announced a month ago. And the special committee of Dell's board members has fired back, saying that the deal is fair and so is the process that is being …
Of course Dell's got skin in the game
The author dismisses Dell's 14% stake in the current company, but that's valued at something like $3.5 billion (or more, according to SAM). Dell *does* have the option to sell it instead of contributing it to the LBO. If Mr. Morgan feels $3.5 billion + $750 million in other funds, maybe 20% of the deal in total, isn't skin in the game, then I'm very glad he's not entrusted with something like specifying buyers' minimum down payments on housing purchases. 50% anyone? 75%?
Wait a minute
I hope Dell doesn't get out of the PC business. We've got hundreds of Optiplex PCs (and dozens of Latitude laptops) where I work, and on the rare occasion that something breaks, their service has always been excellent - the parts arrive the next day and they always ask if I need a tech to come and install the parts. My personal experience with Dells is they they've been more reliable than the Macs I've owned.
Re: Wait a minute
Begs the question why they don't make much money on the PC's, then. Either they are offering service that's too expensive and needs to be cheaper, or you're not paying enough in the first place.
Of course, consumers have enjoyed Dell's cheap and cr@p offshored support for years, and that's why I'll never buy one on my own account, or recommend them.
Re: Wait a minute
I wouldn't say we don't pay enough, but as a large state-funded university, they seem to offer us fairly good deals :-) On the other hand, I don't look at their profit margins. I do recommend Dells (and Apples), but that's mainly because they seem to install less crapware than other manufacturers. Caveat emptor, however.
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