Carl Icahn Steps Into Dell Buyout Fight
Shares of Dell jumped today, at least initially, on word that the activist investor Carl Icahn had taken a 6 percent stake in computing giant Dell and will likely oppose the company’s plan to go private in a leveraged buyout.
Dell rose nearly 2 percent after CNBC reported Icahn’s move, though it hasn’t been completely confirmed since Icahn hasn’t filed a 13D with the U.S. Securities and Exchange Commission confirming. CNBC cited “trading sources” who were confident about it, however. Investor sentiment appeared to waver a bit in choppy after-hours trading.
Assuming Icahn’s position is confirmed, the fight against Dell’s go-private plan suddenly gets a lot more interesting. Icahn is said to want a “leveraged recapitalization” of the company instead of the buyout at the proposed price of $13.65 a share. He’s also interested in a special dividend amounting to $9 a share.
Earlier today, Dell’s board of directors defended their actions against criticism from shareholders. Some, like Southeastern Asset Management, have argued that the buyout price is too low, and should be closer to $24 a share.
And if that weren’t enough, Bloomberg News is now reporting that Hewlett-Packard and Lenovo have been drawn into discussions with Dell’s board as part of the “go-shop” process during which Dell’s board is supposed to be seeking superior bids.
Yet in the second paragraph, Bloomberg’s chatty banker sources drain all the importance out of the story. The only reason HP and Lenovo are kicking the tires is to see Dell’s books, “so it’s unlikely an alternative bid will emerge.”