Dell Inc's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell as he leads the effort to turn around the company without the constraints of public ownership.
Southeastern sent a letter to Dell's board expressing its "extreme disappointment" in the offer price of $13.65 a share, it said in a regulatory filing.
It said it "currently intends to avail itself of all options at its disposal to oppose proposed transaction."
The Memphis, Tennessee-based fund, which owns a 8.5 percent stake in Dell, said it values the entire company at about $24.00 per share.
The fund said it believes the Dell board had several alternatives that would have produced a far better outcome for public shareholders, including breaking up the company and selling the units separately.
"Selling multiple business units to strategic buyers could easily exceed $13.65 per share," it said.
Reuters had reported earlier that Southeastern was unhappy with the offer.
With Southeastern's objections, shareholders representing 11 percent of the Dell shares not held by Michael Dell have now said they will vote against the deal.
Under the buyout's terms, a majority of shares not held by Michael Dell must be voted in favor of the deal for it to proceed.
Michael Dell earlier this week struck a deal to take Dell private for $24.4 billion in the biggest leveraged buyout since the financial crisis, partnering with the Silver Lake private equity firm and Microsoft Corp.
Dell Chief Financial Officer Brian Gladden told Reuters in an interview on Tuesday that the company can now pursue its turnaround strategy without being limited by the pressures of public ownership.
Representatives of Dell and Silver Lake declined to comment on Southeastern's statement.