After proposing an alternative future for Dell that does not include going private, Carl Icahn and Southeastern have released a list of their preferences for future board nominees.
Rather than agree to sell Dell to the company's founder Michael Dell and private equity firm Silver Lake — which would like to take the PC-maker private for $24.4 billion — the company's largest investors Carl Icahn and Southeastern took matters into their own hands. The shareholders, vehement and vocal opposers of the $24.4 billion deal — equating to $13.65 per share — proposed an alternative way to save the company.
A number of investors believe that the founder and equity firm's proposal seriously undervalue Dell. Southeastern and T. Rowe Price Group are among this number, and Catherine Christner accused Dell's board of directors of selling "Dell on the cheap," lodging a complaint with Delaware Chancery Court.
The investors submitted a new proposal that would grant shareholders either $12 per share in cash or $12 in additional shares for each share currently held, financed through approximately $5.2 billion in new debt and existing cash reserves.
Icahn and Southeastern hold roughly 13 percent of Dell's stock.
As a result, Dell's Special Committee, given the task to review proposals, asked Carl Icahn for additional information. The committee has asked for clarification on a number of points, including whether the proposal should be treated as an acquisition plan or simply an alternative if Michael Dell's offer is rejected, evidence of how many shareholders would be willing to accept the new deal, how it will be financed, and what long-term strategy the PC-maker would implement to cope with debt financing.
On Monday, Icahn released a list of 12 potential Dell board of director candidates who could take the company forward. The names submitted to the committee include Icahn himself, according to Reuters. In addition, Bernard Lanigan Jr., chief executive of Southeast Asset Advisors, Jonathan Christodoro, managing director at Icahn Capital, Icahn Enterprises President Daniel Ninivaggi (formerly of Motorola Mobility), technology veteran Harry Debes, and Rahul Merchant, New York City's chief information officer, have all been put forward.
New York City approves Merchant's nomination, on the condition that he does not involve himself in any dealings with Dell or any company connected with Southeastern to prevent a conflict of interest.