Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • PC Hardware

    Dell Board Looks for More Info on Icahn Buyout Proposal

    By
    Jeff Burt
    -
    May 13, 2013
    Share
    Facebook
    Twitter
    Linkedin

      Dell’s board of directors wants more information from Carl Icahn and Southeastern Asset Management before considering their pitch for buying the world’s third-largest PC maker.

      Icahn and Southeastern—which, combined, hold about 13 percent of outstanding Dell stock—in a letter to the board May 9 harshly criticized the $24.4 billion bid by CEO Michael Dell and Silver Lake Partners to buy Dell and take it private, calling it a “giveaway agreement” that benefits Michael Dell at the expense of shareholders.

      In the letter, they proposed a plan that would keep the company public, return more money to investors and essentially remove Michael Dell from the company.

      The special committee that Dell’s directors created to review proposals for the company, in a letter to Icahn and Southeastern May 13, said more information is needed before considering their proposal. One thing they want to know is whether the two are actually making a bid for the company.

      “It is not clear to us whether you intend to formulate your transaction as an actual acquisition proposal that the Board could evaluate and potentially endorse or accept or rather to propose it as an alternative that the Board could consider in the event the pending sale to private equity firm Silver Lake and Michael Dell is not approved,” the board wrote.

      In particular, the directors want Icahn and Southeastern to file a draft definitive agreement outlining their proposal, more information on the financing for the bid, and who would be on Dell’s senior management team and what the company strategy will be should they buy the company. Only then can the special committee evaluate whether their bid is a superior offer to Michael Dell’s, members said.

      The pitch by Icahn and Southeastern is only the latest challenge to Michael Dell’s proposal, which he announced in February. Michael Dell and Silver Lake, with a $2 billion boost from Microsoft, would pay $13.65 per share in the leveraged buyout and take the company private, a move that Michael Dell has argued would enable him and other Dell executives to accelerate the vendor’s transformation from primarily a PC maker to an enterprise IT solutions and services provider.

      Soon after the proposal was made public, some large investors—including Southeastern and T. Rowe Price—said the bid significantly undervalued the company and that they would vote against it and possibly engage in a proxy fight to stop the deal. Later, both Icahn and private equity firm Blackstone Group made counter-offers, though Blackstone Group last month withdrew its bid.

      Now Icahn and Southeastern appear to be making a bid for the company, in which investors could either get a $12-per-share cash dividend or receive $12 in additional shares for $1.65 a share. Icahn and Southeastern both will opt for the shares, not the cash, they said. They would finance the proposal using available Dell cash and about $5.2 billion in new debt, though they did not say where the money would come from.

      In their May 9 letter, Icahn and Southeastern urged the directors that if they didn’t feel their offer was better than Michael Dell’s, to at least let shareholders see the two bids side-by-side and vote on which they liked best. They also said that if they were turned down, they would push to have a new board of directors that they pick be elected.

      “We have great respect for Michael Dell for creating and building Dell and also for the ‘negotiating’ ability he has shown in getting his Board to grant to him this almost absurd bargain,” Icahn and Southeastern wrote in their letter. “However, we believe all shareholders (at their discretion) should have the opportunity to participate in the upside potential we believe is present, not solely Michael Dell and an opportunistic buyout group leveraging to the hilt the company’s own assets with very little of their own equity.”

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Android

      Samsung Galaxy XCover Pro: Durability for Tough...

      Chris Preimesberger - December 5, 2020 0
      Have you ever dropped your phone, winced and felt the pain as it hit the sidewalk? Either the screen splintered like a windshield being...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×