Dell buyout in turmoil as Icahn enters the fray

Published on NewsOK Modified: March 7, 2013 at 4:53 pm •  Published: March 7, 2013
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Investors appear to be banking on a higher offer. Dell shares have mostly traded above the buyout offering price since the deal was announced, a sign that investors expect a sweeter offer.

Dell has been trying to reduce its dependence on PCs. Michael Dell says the company can thrive again by expanding into business software, data analytics, storage and other more profitable niches in technology — a transition that he says would be easier without having to worry about the short-term financial interests of Wall Street.

Dell's strengths are overlooked by shareholders focused on short-term profits, Kelleher said. He said the company's difficult transition will take years, and "it would be preferable to do it behind closed doors."

If the current agreement is approved, Dell will end its 25-year history as a publicly traded company.

Icahn wrote that the PC maker's future is bright, and all shareholders should benefit from that, not just Michael Dell. He said Icahn Enterprises holds a substantial stake in Dell. CNBC reported this week that Icahn had acquired about 6 percent of Dell's stock.

Icahn did not return a call seeking comment.

Icahn is known for buying out-of-favor stocks and boosting them by pressuring or replacing boards of directors, installing new management and other hard-knuckle tactics.

Dell appointed a special committee of directors last August after Michael Dell notified the Round Rock, Texas, company that he was exploring a buyout bid in partnership with other investors. Michael Dell has agreed to contribute 273 million of the company stock that he controls and $750 million in cash to help finance the buyout, which relies primarily on loans from PC software maker Microsoft Corp. and an assortment of banks.

Dell's special committee has said it already considered a special dividend during a "rigorous" five-month review that culminated with the buyout plan. It said Thursday in a statement that it is conducting a search for better alternatives to the proposed buyout, and Icahn and others are welcome to participate.

"Our goal is to secure the best result for Dell's public shareholders — whether that is the announced transaction or an alternative," said a statement from the committee.

Shareholder Forum, a group that seeks to protect shareholder interests, has said it wants access to the same information that influenced Dell's special committee to sell at $13.65 per share. The information would be used by experts to perform an independent evaluation of the proposed sale to help shareholders understand if it's the best choice.

The stock fell 10 cents to $14.22 Thursday. It rose a nickel to $14.27 in extended trading after the market closed.

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Daniel Wagner can be reached at www.twitter.com/wagnerreports.



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