Activist shareholder Carl Icahn and Blackstone Group have both offered takeover proposals to computer maker Dell that could thwart company founder Michael Dell’s attempt to take the company private, according to media reports.
Icahn has offered $15 per share in cash for a 68 percent stake in the company while Blackstone has made an offer exceeding $14.25, according to several unidentified sources cited by Bloomberg and Reuters. Both offers top Dell’s bid of $13.65 per share, which several shareholders have complained is too low. Dell shares, which have been boosted by the buyout attempt, closed at $14.14 on March 22, the most recent trading day.
The Blackstone and Icahn offers would also allow shareholders to remain invested in the company to profit from any upswings in the company after the sale, according to the news agencies. That addresses another complaint among shareholders about the founder’s offer, which would take the company fully private.
Dell’s board is considering the offers and is likely to say early this week whether either offer is superior to the offer made by Michael Dell or whether it needs more time to consider the proposals, the media companies report. After that, if the board decides either offer is more attractive it will give the company’s founder four business days to come up with a better proposal. He could make only one increased offer, according to a board ruling.
Dell’s founder announced last month that he would team up with mutual fund Silver Lake, the company’s second-largest outside shareholder, in an attempt to take the company private for around $24.4 bn. Under the proposal, Dell would remain the company’s chief executive and attempt to turn around the computer maker’s fortunes after years of falling market share and declining profits, free of the constraints it’s subjected to as a public company.
Southeastern Asset Management, Dell’s largest outside shareholder, voiced objections in February to the founder’s buyout offer, saying the company is worth about $24 per share – more than $10 more per share than Michael Dell’s current bid.
‘The board of directors appears to have dismissed better alternatives for public owners and selected a transaction, publicly derided by shareholders as opportunistic and grossly undervalued, that favors management,’ wrote Southeastern Asset Management’s CEO Mason Hawkins and fund president Staley Cates in a letter to the Dell board earlier this month.
Also in a letter to Dell last month, before his reported competing offer, Icahn complained that the founder’s buyout offer ‘substantially undervalues the company’ and warned that ‘we anticipate years of litigation will follow challenging the transaction and the actions of those directors that participated in it.’
