Dell is trying to reassure shareholders about its proposed US$24.4 billion ($29.2 billion) acquisition by a group led by its founder, saying it considered a number of strategic options before agreeing to the deal.
Dell laid out the advantages of the transaction in a regulatory filing on Monday, three days after a major shareholder ridiculed the buyout as a rotten deal that undervalues the business.
On Friday, Southeastern Asset Management sent a letter to Dell's board of directors. Southeastern's CEO, O Mason Hawkins, threatened to lead a shareholder mutiny unless Dell came up with an alternative acquisition offer.
Hawkins vowed to wield Southeastern's 8.5 per cent stake to thwart the deal currently on the table. Only Michael Dell, the computer company's founder and CEO, owns more stock with a roughly 14 per cent stake.
Texas-based Dell said in its filing it had determined with independent advisers that the cash bid by a group led by Michael Dell was in the best interests of stockholders.
Dell also said the deal allows time for alternate bids do that shareholders will be able to see if there are superior options available.
Southeastern and other stockholders will be paid US$13.65 per share to leave the company in control of Michael Dell, who founded the business in his University of Texas dorm room in 1984.
Michael Dell is contributing about US$4.5b in stock and cash to help pay for the deal. The rest of the money would be supplied by the investment firm Silver Lake, loans from Microsoft and a group of banks.
The loans will burden Dell with debts that could leave the company with less money to invest in innovation and acquisitions.
Dell said on Monday that the deal "shifts the risks facing the business to the buyer group".
The proposed US$24.4b purchase price is 80 percent below Dell's top market value of more than US$150b at the peak of the dot-com boom 13 years ago.
The US$13.65 per share offer is 25 per cent above where Dell's stock stood last month, before word of the buyout negotiations leaked out in the media. Dell's stock has plunged during the past year as PC sales have slumped amid the technological upheaval caused by the growing popularity of smartphones and tablet computers.
Dell shares closed up 7 cents at US$13.70 on Monday.