Michael Dell Defends $24.4 Billion Plan to Buy Company
The CEO tells investors that remaking Dell would be easier as a private company, and that Carl Icahn's opposing plan would harm the company.Michael Dell still believes taking his namesake company private is the best chance it has to reduce its dependence on the shrinking PC market and becoming a bigger player in enterprise data centers. The company's founder and CEO, who laid out his thoughts in a presentation June 21 to investors that also was filed with the Securities and Exchange Commission, said that transforming from a PC maker to a vendor of enterprise IT solutions and services—already a daunting task—will become even more difficult if the company remains public. Buying out the company and taking it private is the best way to ensure Dell's long-term success, Michael Dell said. At the same time, he also pushed back at a bid by activist investor Carl Icahn, who is trying to sell an alternate plan that would include Dell buying back more than 1 billion shares at $14 apiece and keeping the company public. In advocating for the $16 billion tender offer, Icahn has harshly criticized Michael Dell's $24.4 billion plan, saying the $13.65-per-share proposal undervalues the company and benefits the CEO over investors.
However, in his June 21 presentation, Michael Dell not only made the pitch for his bid—which is being offered along with private equity firm Silver Lake Partners—but also let Icahn and others know that, should the offer fail to get the necessary shareholder support at the July 18 investor meeting, he intends to stay on as CEO and work to block Icahn's bid.