Investor says Dell buyout offer is "unfair" Southeastern Asset Management, the largest outside shareholder in Dell, said on Tuesday that Dell's board had not made a compelling case for accepting the $13.65-a-share buyout offer made by Michael Dell and Silver Lake Partners. Southeastern, owner of 8.4 per cent of Dell shares, has been the most outspoken critic of the move to take Dell private, arguing that the $24.4bn management buyout is unfair to long-term shareholders, giving them no opportunity to participate in any turnround. The letter comes in response to a proxy statement filed by Dell late last month that detailed the process that led to the buyout, painting a stark picture of a faltering company, and also revealing that it was Southeastern that first proposed a buyout to Mr Dell. Southeastern was quickly boxed out of the process, however, and the deal on the table would mean Mr Dell and Silver Lake buying out all public shareholders. Opposition to this structure from Southeastern and others helped inspire Blackstone to make a preliminary offer for Dell that would allow some shareholders to roll over their equity into a publicly traded stub, a structure Southeastern endorses. This would leave a minority of the company's equity publicly traded after the company had been recapitalised using debt. Dell's special committee and its advisers argue that Dell was no longer viable as a public company. Its shares fell 50 per cent in 2012 as it continued to miss quarterly earnings expectations and embarked on an ambitious but slow turnround strategy. Southeastern contends that, in deciding to accept the buyout offer, the special committee focused too much on Dell's faltering PC business and not enough on its growing enterprise business. Dell's special committee defended its work after receiving the letter, saying its process was thorough, and that the risks of Dell remaining a public company were high. Dell has spent more than $13bn on deals to bolster its non-PC business in recent years. "Long-term owners such as Southeastern have supported Dell in its transformation into an enterprise solutions company, but are not being given the opportunity to participate in the return on that $13bn investment," Southeastern said. Southeastern also said that the process was inadequate, and failed to seriously consider a leveraged recapitalisation that would allow for a public stub. "While the special committee may have worked diligently and was assisted by credible and reliable professionals, even a good process - without the exercise of proper business judgment - can result in a bad transaction," Southeastern said. Southeastern noted that over the past two years Dell had bought back 224m shares at an average price of $15.25 a share, a steep premium to the price it was now suggesting shareholders sold for. "We believe the board's sudden rush to sell is triggered by one thing: Mr Dell's desire to buy," Southeastern said. Dell shares closed almost unchanged on Tuesday at $14.19. Blackstone began conducting due diligence at Dell headquarters this week, and Southeastern encouraged the special committee to seriously consider the alternative proposals from Blackstone and Carl Icahn, who has also submitted a preliminary offer. "We view these proposals as superior primarily because each offers shareholders the opportunity to remain owners of Dell, while also offering a higher cash price to owners who choose to exit their investment," Southeastern said.