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.

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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.

Topics: Dell

About

Charlie Osborne, a medical anthropologist who studied at the University of Kent, UK, is a journalist, freelance photographer and former teacher. She has spent years travelling and working across Europe and the Middle East as a teacher, and has been involved in the running of businesses ranging from media and events to B2B sales. Charli... Full Bio

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