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

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of