Dell committee rejects Icahn's bid as 'inconsistent'

Dell committee rejects Icahn's bid as 'inconsistent'

Summary: Dell's special committee, designed to oversee its going-private deal, blasts Carl Icahn's deal, and accuses the investor and friends of inconsistently valuing the company's shares.


Dell's independent special committee has criticized proposals by activist investor Carl Icahn and his partner Southeastern Asset Management as lacking credibility.

The PC maker announced in February that it planned to go private, yanking itself from the public market, in a deal that saw the company's founder Michael Dell in conjunction with investment firm Silver Lake offering $24.4 billion, or $13.65 per share.

Since then, his plans were somewhat scuppered by rivals wanting a slice of the PC maker. Despite rival bids, such as those from Icahn (who has previously publicly criticized the company's founder's bid), the committee overseeing the going-private deal still favors the original $24.4 billion buyout by Michael Dell. 

But not without throwing Icahn's proposals under the bus while it had the opportunity.

In a Schedule 14A filing with the U.S. Securities and Exchange Commission (SEC), a series of slides show the committee's reluctance to go with Icahn's recapitalization proposals, slamming them as "inconsistent."

Here's the slide in question:

(Image: Dell via SEC)

Key to the claims made by the committee, Icahn has yet to work out or explain how to secure financing "for any of these schemes" should shareholders approve the deal, the slides show.

The committee also stated that if Icahn could drum up the cash needed for his proposal, it would only allow for a dividend to shareholders of $8.15, rather than the $10 he promised. 

Icahn's latest offer puts forward $14 a share for around two-thirds of Dell, slightly higher than the PC maker's founder's offer. 

A vote on the deal is expected on July 18.

Topic: Dell

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  • There's only one savior

    Going private. Let Icahn take-over, he'll leverage Dell to the max, pay out investors a dividend, until Dell will have nothing left but to continually downsize into nothing or acquisition by a rival.

    By going private, there will be maybe a single large round of layoffs, and a streamlining of the entire company. Because they really need some money pumped into R&D and integration of their acquisitions...
  • Icahn the Destroyer

    Icahn will conduct massive layoff and sell off of all assets and employees. He will leverage Dell with as much debt as possible, sell the profitable parts then fold the company and walk away. The only one coming out ahead are himself and his partners.

    Dell is dead!
    • Offer hasn't been accepted

      And according to the article, the Dell committee charged with reviewing it is recommending that stockholders reject it.

      Icahn hasn't won yet.
      John L. Ries
      • The committe is angling for a better deal, and a better deal

        will be forthcoming, and Dell will become an iCan't property.

        Dell is no longer what it used to be, and they're not competitive in today's world of mobile devices, whether Windows based or Android based.
        • Interesting

          Do I detect some antipathy to Mr. Icahn (a highly successful stock speculator and corporate raider who has made lots of money through his own efforts)? I would have thought that you would be telling us that this is strictly between Dell and its stockholders and that therefore outsiders (to include customers) should mind their own business.
          John L. Ries
          • Antipathy? Where did you find that in my comments? Imagining things

            is not the same as reading comprehension. And, trying to read things in my comments which aren't there, is the same thing as making things up.

            I have nothing against what Icahn does, and he might be good for many companies.

            The nucleus of my comments have to do with Dell. Again, it's about Dell.

            What I'm saying with my comments, is that Dell may be beyond recovery, and it's too late for even Icahn to rescue it. The ICan't comment was in reference to a Dell which ICahn can't rescue.

            The other part of my comments was in reference to what the investors want, and what they want is not necessarily a rescue package for Dell, but a rescue package for their investments. It's all about the money, for Icahn and for the investors. Keeping the company alive seems to be not the primary consideration.
          • Re: Antipathy? Where did you find that in my comments?

            I don't know ... iCan't quite put my finger on it ...