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Carl Icahn sweetens bid for Dell -- again

July 12, 2013|By Andrea Chang
  • Billionaire Carl Icahn (right) has sweetened his bid for Dell Inc. in an effort to block Chief Executive Michael Dell (left) from taking the company private.
Billionaire Carl Icahn (right) has sweetened his bid for Dell Inc. in an… (Virginia Mayo / Mark Lennihan…)

Billionaire Carl Icahn has again upped his bid for Dell Inc., this time by adding a warrant to his  takeover plan.

Under the modified plan by Icahn and Southeastern Asset Management, shareholders would receive $14 a share and a warrant for every four shares that they tender. The warrants could be used to purchase Dell shares for $20 in the future.

The move is widely seen as an attempt to force company founder and Chief Executive Michael Dell, who is hoping to take the computer maker private in a $24.4-billion leveraged buyout, to increase his bid. Michael Dell's bid of $13.65 a share, made with global technology investment firm Silver Lake Partners, was seen by many as too low.

"We believe that the total value to tendering stockholders would be approximately $15.50 to $18 per share, as compared to Michael Dell/Silver Lake's offer of $13.65 a share," Icahn said in a letter to shareholders. "Because Icahn and Southeastern have agreed not to tender their shares, if you choose to tender, a minimum of 71% of your Dell stock would be purchased at $14 per share, plus the warrant."

An email and call to Dell for comment were not returned. Shares of the Round Rock, Texas-based company were little changed at 12:30 p.m. PDT.

The letter follows a separate message issued Thursday in which Icahn encouraged holders of Dell stock to opt for appraisal rights, which he said presented a "rare opportunity to make a profit without taking risk."

"Under the law, if you are dissatisfied with the price that you are being forced to take in a 'going-private' transaction that you did not vote for, you can go to court for an appraisal," Icahn wrote. "The reason that doing this is a 'no-brainer' is because the law allows you to change your mind up to 60 days after the transaction is consummated. All you have to do is notify Dell before the vote that approved the transaction."

Icahn said his firm opted Wednesday for appraisal on the approximately 152 million shares, or 8.7%, of the company that it owns.

Michael Dell announced his takeover plan in February. Going private would enable the company, which has seen slumping demand for its PCs and other products, to remake itself away from Wall Street pressures.

In 1984, when he was 19, Michael Dell started PC's Limited in his University of Texas at Austin dorm room with $1,000. The company would go on to become Dell.

Shareholders are scheduled to vote on his takeover plan on July 18.


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