Carl Icahn and Dell Enter Confidentiality Agreement Over Buyout Deal

Published on March 11, 2013
by Arik Hesseldahl

shhhh-feature-featureShares of Dell are rising this morning on word that computing giant Dell has entered into a confidentiality agreement with the activist investor Carl Icahn. The move will allow Icahn to review Dell’s books and also to communicate with Dell’s board of directors about the terms of the $24 billion leveraged buyout it is seeking that would take the company private.

Icahn stepped into the fray last week, announcing that he had acquired a stake amounting to about 6 percent of Dell shares.

Dell shares rose by 1 percent in premarket trading to $14.30 a share as of a few minutes before 9 am ET.

In a letter to Dell’s board, which was made public in a filing with the U.S. Securities and Exchange Commission, Icahn had argued that the company’s plan to sell itself to founder and CEO Michael Dell and private equity firm Silver Lake Management at $13.65 a share “significantly undervalues” the company.

Icahn proposed instead that Dell pay shareholders a special dividend of $9 per share that would be paid for by a combination of cash on hand and additional debt. The letter came as Evercore Partners, a Dell adviser, has been running a “go shop” process, under which it is seeking alternative offers. Dell’s rivals Hewlett-Packard and Lenovo have both taken advantage of that process in order to get a look at Dell’s books.

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