Icahn Pushes New Dell Plan

Jun 19 2013 | 9:43am ET

With his proposed leveraged recapitalization of Dell Inc. on life-support, Carl Icahn is changing tack.

The billionaire yesterday urged Dell shareholders to reject the $24.4 billion buyout offer from company founder Michael Dell and private-equity firm Silver Lake Partners next month, and, when the time comes, to elect his chosen slate of candidates to Dell's board of directors. That new board would begin a $16 billion share buyback program, he said.

Icahn and his partners, Southeastern Asset Management, had previously proposed a recapitalization of Dell that would pay shareholders a $12 per share special dividend and allow them to remain investors in the company, as opposed to the Silver Lake deal, which would take Dell private. Dell has rejected that proposal, noting it has a $3.9 billion funding shortfall.

Icahn's newest "concept" isn't proving any more amenable to the company, which said, "There is neither financing, nor any commitment from any party to participate, nor any remedy for the company and its shareholders if the transaction is not consummated."

Icahn said he would buy back Dell shares for $14, $0.35 more per share than offered by Silver Lake. He said the board would pay for it with $7.5 billion of Dell's cash, the sale of Dell's receivables and the $5.2 billion in financing he had arranged for the recapitalization.

Icahn also disclosed that he had bought about $1 billion in Dell shares from Southeastern, making him the company's largest outside shareholder.

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