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Another major Dell shareholder opposes sale price

Dell was once the world’s largest PC maker but now ranks third, behind Hewlett-Packard Co. and Lenovo Group. Above, a company factory in India.

Babu via Reuters/File 2011

Dell was once the world’s largest PC maker but now ranks third, behind Hewlett-Packard Co. and Lenovo Group. Above, a company factory in India.

SAN FRANCISCO — A shareholder rebellion against Dell’s proposed $24.4 billion sale to its founder and other investors is gaining support, fueling a belief that the struggling personal computer maker will have to wrangle a higher price to get the deal done.

Mutual fund firm T. Rowe Price joined the opposition Tuesday. It and another shareholder, Southeastern Asset Management, say founder and chief executive Michael Dell and the investment firm Silver Lake are being allowed to seize control and end Dell Inc.’s 25-year history as a publicly held company for too little money.

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‘‘We believe the proposed buyout does not reflect the value of Dell, and we do not intend to support the offer as put forward,’’ T. Rowe Price’s chairman, Brian Rogers, said in a statement. T. Rowe Price and Southeastern are the two largest independent shareholders and together own nearly 13 percent of the company.

Michael Dell has committed his 14 percent stake to the deal; he is the only investor with more stock than either of the two.

Although Dell remains one of the world’s largest technology companies, with about $57 billion in annual revenue, it has become less attractive to investors as smartphones and tablet computers siphon sales away from PC makers. To make matters worse, Dell has been losing market share. The company once was the world’s largest PC maker but now ranks third, behind Hewlett-Packard Co. and Lenovo Group.

Michael Dell says it will be easier to accelerate Dell’s expansion into more lucrative areas such as technology consulting and business software if the company does not have to cater to Wall Street’s fixation on whether profits are rising from one quarter to the next.

The company, based in Round Rock, Texas, said it remains convinced it is selling at a fair price, at a 25 percent premium from where the stock stood before word of the buyout negotiations leaked out last month. Dell’s board said it considered a wide range of alternatives.

The proposed price of $13.65 is more than 40 percent below Dell’s stock price of roughly $24 six years ago, when Dell returned for a second stint as CEO.

Southeastern, which came out against the proposed deal last week, argues that Dell is worth $23.72 per share, or about $42 billion. T. Rowe Price did not provide an estimate.

It’s unclear how other large shareholders feel about the deal, but the opinions of Southeastern and T. Rowe Price seem likely to embolden others to join the resistance. Southeastern owns 8.4 percent of Dell, according to a Tuesday regulatory filing.T. Rowe Price owns 4.4 percent, according to FactSet.

Jefferies analyst Peter Misek predicted the current offer will have to be sweetened to $15 per share, or nearly $27 billion.

Dell’s stock is now trading above the current offer, a sign that more investors are becoming convinced the bid will be raised.

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