News Column

Icahn Has Plan to Derail Dell Buyout

May 10, 2013

Josh Kosman; Mark DeCambre


Carl Icahn and Southeastern Asset Management, Dell's biggest outside shareholder, are launching their campaign to derail a buyout of the PC maker.

The pair is proposing that the company pursue a leveraged recapitalization that will pay shareholders a $12-per-share dividend.

Their rival proposal, which is outlined in a letter to the company's board, threatens to complicate a bid by founder and CEO Michael Dell to take the company private.

In February, Michael Dell, who owns a 15.6 percent stake, and private-equity firm Silver Lake Partners signed a definitive agreement to buy the company for $13.65 a share, or $24 billion.

Under Icahn's proposal, shareholders could take a dividend equal to 88 percent of Dell's offer and still keep their shares. They could opt to have the dividend paid in cash or additional stock.

Icahn and Southeastern are proposing that the company fund the dividend by repatriating the $9 billion in cash it has sitting offshore, as well as borrowing money against Dell's account receivables. Its net account receivables totaled $9.8 billion. In addition, Dell would be borrowing $5.2 billion. The duo also is announcing its slate of 12 directors ahead of Dell's annual meeting, expected to be held in June or July. Shareholders will vote on the buyout plan and the re-election of directors.

The Post first reported this week that Icahn and Southeastern would launch a proxy contest in a push to get directors onto the board.

Originally published by Josh Kosman and Mark DeCambre.

(c) 2013 The New York Post. Provided by ProQuest LLC. All rights Reserved.

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Source: Copyright The New York Post 2013

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