Alternative to Dell buyout deal proposed by Icahn, Southeastern

Alternative to Dell buyout deal proposed by Icahn, Southeastern

Summary: Two of Dell's largest shareholders are still dead-set against the firm going private, and so have proposed an alternative deal.


Investors Carl Icahn and Southeastern Asset Management have proposed an alternative arrangement to the $24.4 billion buyout deal led by Silver Lake and company founder Michael Dell.

As reported by the Wall Street Journal, Icahn and Southeastern -- which have opposed the deal since the beginning -- have suggested that Dell shareholders be given the option of holding stock in the PC maker. In addition, investors could take an additional $12 a share in cash or stock.

In a letter addressed to Dell's board, obtained by the publication, Icahn and Southeastern propose these measures will keep the company public.

"You now have the opportunity to ameliorate the damage that we believe you have caused to Dell and its shareholders by following the fair and reasonable path set forth in this letter," the letter reads.

The two largest investors in Dell hold 13 percent of the firm's stock, whereas founder Michael Dell and related parties hold roughly 16 percent. Icahn and Southeastern, among other investors, believe that the $24.4 billion buyout deal -- $13.65 a share -- seriously undervalues the company.

Shareholder Catherine Christner accused Dell's board of directors of selling "Dell on the cheap," and believes that the founder has abused his position as CEO. In addition, the disgruntled investor filed a complaint with Delaware Chancery Court.

Blackstone launched an attempt to prevent the firm's founder taking Dell private -- removing shareholder control and blinding the eyes of Wall Street -- by offering $14.25 a share. However, the private equity investment firm dropped out of the running in April.

Topic: Dell

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  • Dell, Just Close up already

    You won't be missed.
  • Is more better than less?

    Ichan-->$12 a share Dell-->$13.65/share

    "More is better than less because if there's more less stuff, then you might want to have some more. However, your parents won't let you because there's only a little. If you really like something, you'll want more of it......"

    Thank you AT&T
    Julie Dinkins-Borkowski
    • $12 is more like a dividend

      Under Icahn's plan, the shareholder gets the $12 and keeps a share in the company, vs the Dell/Silverlake deal of selling the share $13.65. So it's not 12 vs 13.65, it's whether you value the post-Icahn share at more than $1.65.