Dell Seeks More Info. On Icahn Offer

May 13 2013 | 1:37pm ET

Dell Inc. expressed skepticism over Carl Icahn's latest bid to derail the computermaker's $24.4 billion leveraged buyout, asking the dealmaker to provide more details about his plan for a special dividend.

Last week, Icahn and Southeastern Asset Management, the second-largest Dell shareholder, released a proposal for Dell to pay a special dividend of $12 per share, either in cash or in new shares. Under that plan, Icahn and Southeastern would seek to build a group holding about one-third of Dell's current shares to take the new shares, with the subsequent dilution giving that group a two-thirds stake in the company.

The special committee of Dell's board overseeing its proposed sale to a group led by private-equity firm Silver Lake Partners and Michael Dell, however, seemed more confused than convinced by Icahn's plan.

"It is not clear to us whether you intend to formulate your transaction as an actual acquisition proposal that the board could evaluate and potentially endorse or accept or rather to propose it as an alternative that the board could consider in the event the pending sale to Silver Lake and Michael Dell is not approved," the committee wrote.

The committee also expressed reservations about Icahn's plan to finance the dividends with Dell's existing cash holdings and the sale of its accounts receivable, worrying that those moves would reduce its future cash flow.

Icahn and Southeastern appear unlikely to be deterred, however: In their proposal last week, they blasted the Silver Lake deal, which offers $13.65 per share in cash to take Dell private, as "the great giveaway" and the board itself, and threatened legal action against the company.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.