Icahn To Look At Dell's Books, Boosts Herbalife Investment

Mar 12 2013 | 12:15pm ET

Carl Icahn is moving ahead on two of his most prominent current investments.

The legendary activist has struck a confidentiality agreement with Dell Inc., giving him access to its books. Icahn said he has built up a "substantial stake" in the computer-maker and last week demanded the company abandon its planned $24.4 billion profit in favor of a leveraged recapitalization that would pay investors a special dividend of $9 per share.

Icahn said if he did not get his way, he would consider a proxy bid and embark upon "years of litigation." But the agreement between the two sides may indicate that a deal between them on substantive matters is possible.

Icahn said yesterday that his firm "looks forward to commencing its review of Dell's confidential information."

Dell in February announced that it would go private in a leveraged buyout led by founder Michael Dell, private equity firm Silver Lake Partners, Dell's hedge fund MSD Capital and Microsoft. Last week, Dell's board invited Icahn to make an offer for Dell himself as part of its go-shop period. The Blackstone Group, Hewlett-Packard and Lenovo have also signed confidentiality agreements to explore counteroffers for Dell. The go-shop period expires on March 22.

"The special committee welcomes Carl Icahn and all other interested parties to participate in the 'go-shop' process," a special committee of Dell's board said. "Our goal is to determine if there are alternative transactions that could be superior to the going-private transaction and to secure the best result for Dell's public shareholders—whether that is the announced transaction or an alternative."

Separately, Icahn is continuing to build his stake in nutritional supplements company Herbalife. His firm now owns 15.5% of the company, up from 13.6% earlier this month, when Herbalife agreed to put two Icahn nominees on its board of directors.

As part of that deal, Icahn agreed to limit his stake in Herbalife to 25%.

Icahn has began aggressively investing in Herbalife after nemesis William Ackman of Pershing Square Capital Management called the company a pyramid scheme.

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