Billionaire investor Carl Icahn said Monday he has the money he needs
to make a formal offer for Dell Inc., and says he wants to meet with the special
committee to the company's board of directors to iron things out.
Icahn said Jeffries Finance, a New York investment bank, has committed to lend $1.6 billion of a $5.2 billion package of debt that Icahn plans to use to offer $14 a share to about 72 percent of Dell's shareholders.
The total Icahn offer would include $7.5 billion of Dell Inc.'s cash and $2.9 billion derived from the sale of its receivables.
"With that we put an end to the unwarranted speculation by Dell that our money would not be available," Icahn said in an open letter to shareholders filed with the U.S. Securities and Exchange Commission.
Icahn said he wants the Dell Inc. special committee to declare his offer to be "superior" to the $24.4 buyout offer made by company founder Michael Dell and the Silver Lake Partners investment firm, which amounts to $13.65 a share for all the company's shares.
Michael Dell and Silver Lake propose to take the Round Rock computer maker private as part of revival plan for its business.
Icahn proposes to have Dell Inc. remain a public company. If the special committee does not choose to call his plan "superior," he at least wants it to rescind its recommendation of the Michael Dell/Silver Lake plan.
Icahn and his backer, investor Southeastern Asset Management Inc., have maintained for months that the Michael Dell/Silver Lake plan undervalues the company.
All of this action comes less than three weeks before a July 18 special stockholders meeting in which shares will be counted to see if the Michael Dell/Silver Lake plan is approved.
The Dell Inc. special committee said it has reviewed Icahn's letter "and will be pleased to review any additional information, including financing commitments, that it may receive from him regarding his recapitalization proposal. The committee remains committed to achieving the best outcome for all Dell shareholders."
The committee has previously said Icahn hasn't supplied it with enough information to consider his various plans for the company to be anything more than "concepts," rather than concrete offers.
Icahn noted that his proposed $14 a share tender offer is dependent on several things happening: the defeat of the Michael Dell/Silver Lake proposal by shareholders and the election of a slate of directors that is willing to pursue the offer.
Icahn's filing said his proposal calls for raising a total of $15.6 billion that would pay for the purchase of 1.1 billion shares at $14 a share; a $490 million "break-up fee" due to Michael Dell and Silver Lake; $200 million in taxes that could be charged for "repatriating" Dell Inc.'s cash from overseas accounts and $182 million in financing fees.
Dell Inc. employs more than 100,000 people worldwide and about 14,000 in Central Texas.
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