Carl Icahn Proposes $21 Billion Package to Keep Dell Public
Three months ago, Dell's Board of Directors unanimously approved a merger agreement under which company founder Michael Dell and investment firm Silver Lake Partners would acquire the PC maker for $24.4 billion. Michael's plan is to take Dell private so he can run the company as he sees fit without the pressure of answering to shareholders each quarter, and while that still may happen, it's not a foregone conclusion. One person who's been aggressively opposed to the deal since the beginning in Carl Icahn.
Mr. Ichan is viewed as the last major threat to the deal ever since the New York-based investment firm Blackwater Group LP pulled out of its pursuit of Dell by withdrawing an alternative offer (Blackwater Group was spooked by a lower-than-expected earnings forecast by Dell last quarter). In a joint bid with Southeastern Asset Management, a firm that originally called the proposed deal with Micheal an "ill-advised transaction," Mr. Icahn is reportedly offering up $21 billion in cash to shareholders, which translates to a payout of $12 per share. That's less than Michael's offer, which would give shareholders $13.65 per share, but there's a twist.
Unlike Michael's proposal, Icahn would allow shareholders to keep their stock after the payout, and Dell would remain a public company. According to Reuters, shareholders are interested in Icahn's offer, though investors are hoping it will ultimately prompt Michael to make a counter-offer.
Other investors have chosen to jump ship while all this plays out. For example, David Moon, Chairman of Moon Capital Management, said his firm sold its Dell stock several weeks ago and warned others that if a deal for the company isn't made, the company's stock could drop to $10 a share.
Mr. Ichan is viewed as the last major threat to the deal ever since the New York-based investment firm Blackwater Group LP pulled out of its pursuit of Dell by withdrawing an alternative offer (Blackwater Group was spooked by a lower-than-expected earnings forecast by Dell last quarter). In a joint bid with Southeastern Asset Management, a firm that originally called the proposed deal with Micheal an "ill-advised transaction," Mr. Icahn is reportedly offering up $21 billion in cash to shareholders, which translates to a payout of $12 per share. That's less than Michael's offer, which would give shareholders $13.65 per share, but there's a twist.
Unlike Michael's proposal, Icahn would allow shareholders to keep their stock after the payout, and Dell would remain a public company. According to Reuters, shareholders are interested in Icahn's offer, though investors are hoping it will ultimately prompt Michael to make a counter-offer.
Other investors have chosen to jump ship while all this plays out. For example, David Moon, Chairman of Moon Capital Management, said his firm sold its Dell stock several weeks ago and warned others that if a deal for the company isn't made, the company's stock could drop to $10 a share.
