Skip to main content

Dell committee seeks more info from Icahn, Southeastern

Dell Inc's special board committee asked activist investor Carl Icahn on Monday for details of his plan to buy the computer maker, including how he would finance a cash payout for shareholders and who would run the company if his preferred slate of board directors was installed.

_0">

Last week, Icahn and Southeastern Asset Management Inc offered $12 in cash per share or additional shares to existing investors as an alternative to Michael Dell's $24.4 billion bid to take the company private. And the billionaire investor warned he would put up his own roster of candidates for the board if shareholders greenlit the company founder's offer.

 

Icahn's plan assumes that only as much as 80 percent of the company's shareholding will opt for a cash payout, translating into a maximum outlay of $16.8 billion.

Michael Dell, major shareholders such as Southeastern and Icahn are waging a battle over the future of the world's third largest personal computer maker, once a tech-industry high flyer, but now struggling to evolve as people embrace smartphones and tablet computers.

Michael Dell and private equity firm Silver Lake want to take the company private for $13.65 per share, but stockholders, including Southeastern and T. Rowe Price Group Inc, have complained that offer severely undervalues the company.

Instead, Icahn and Southeastern, two of Dell's biggest investors, proposed to give stockholders $12 cash for every share they own, as well as allow them to keep their stock.

Shareholders last week welcomed the alternative proposal, which they said sustained a discussion around Dell's future. But investors might find the latest option on the table unpalatable because of a lack of specifics, some analysts say.

"Most shareholders would prefer the certainty of $13.65 in cash rather than risk the uncertainty and the ensuing stock volatility," Jefferies & Co analyst Peter Misek wrote in a Monday research note. "Our estimates point to possible minimal upside ... to the $13.65 Silver Lake offer, which we do not think would warrant the potential volatility."

Icahn is being advised by investment bank Jefferies Group.

In a letter to Icahn, the committee said it was not clear if he intended to make "an actual acquisition proposal that the Board could evaluate," or if he intended his offer as an alternative in the event the pending sale to Silver Lake and Michael Dell is not approved.

Dell shares were down about 0.2 percent at $13.48 at midday.

QUIZ

Icahn and Southeastern's challenge comes after Blackstone ended its pursuit of Dell in April and pulled out a month after it teamed up with Icahn to challenge the take-private attempt.

Icahn argued in a letter sent to the board and made public in a filing on Friday that Dell operates a large enterprise-focused computing business in addition to its ailing PC division, with strong ties Microsoft Corp and Intel Corp.

Without specifying details, he also said cost savings could be had from merging assembly plants across the world, while there remained opportunities to spin off non-core businesses.

Apart from asking who would make up the company's senior management team under Icahn, the committee said in its Monday letter that they wanted to know his "strategy and operating plan."

The committee also asked for information on the terms of the debt financing required for Icahn's proposal and "contingencies available if cash on hand or stockholder rollovers are less than anticipated," as well as financing commitment letters.

_0">

It said the proposal did not seem to take into account the additional borrowing required if Icahn uses the company's cash in the transaction and reduces future cash flow by selling accounts receivables. In addition, it asked for an analysis of whether the receipt of additional shares would be taxable.

_1">

It also wanted to know more about the relationship between Icahn and Southeastern.

_2">

Icahn was not available for comment.

_3">

Both Icahn and Southeastern said they would finance the proposal from existing cash and about $5.2 billion in new debt.

_4">

Icahn and Southeastern together hold about 13 percent of Dell stock. The billionaire investor previously proposed paying $15 per share for 58 percent of Dell.

_5">

(Reporting by Poornima Gupta, Sinead Carew and Nicola Leske; Editing by Lisa Von Ahn and Andre Grenon)

_6">

Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o