Billionaire Carl Icahn looks to a bet on Dell's future
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E-mail China Daily, May 13, 2013
Falling sales
Icahn also said he'd look to replace founder and CEO Michael Dell if he prevails.
Dell's board is predicting another year of lackluster growth as demand for PCs ebbs, underscoring the urgency behind the company's decision to be taken private, documents filed in March showed.
Sales for the year ending next January will slip to $56.5 billion and Dell's PC business will shrink by $10 billion over four years, according to projections in a proxy statement filed with regulators.
Icahn's latest proposal doesn't contain anything that makes the Michael Dell and Silver Lake group currently inclined to raise its bid, people with knowledge of the matter said.
Whatever the response from Silver Lake, Icahn isn't planning to go quietly. If a special committee of Dell's board doesn't deem his offer superior, Icahn plans a proxy fight to install his own slate of directors.
Proxy contest
Dell is seeking to schedule a shareholder vote on Michael Dell's buyout offer ahead of the annual shareholders' meeting, according to a person with knowledge of the matter. Separating the annual meeting from a vote on Michael Dell's take-private offer removes Icahn's ability to launch a proxy contest, which he could only start at an annual meeting, this person said.
Icahn and affiliates own about 4.5 percent of Dell's shares, the filing shows. Financing for his proposal will come from existing cash at the PC maker and about $5.2 billion in new debt. That compares with about $16 billion of debt under the buyout proposal, according to the letter. Southeastern holds about an 8.2 percent stake, according to another filing.
Jefferies LLC has committed $1.6 billion to help finance the transaction, Icahn said in the Bloomberg TV interview.
"If I have to, I will put in $2 billion of my own," Icahn said.
Blackstone proposal
David Frink, a spokesman for Dell, said in an e-mailed statement that the special committee of the company's board, which fielded buyout proposals, "is reviewing the Southeastern Asset materials and will have comments in the near term".
Representatives of Silver Lake declined to comment.
Blackstone Group LP, the world's biggest buyout firm, pulled out of bidding for Dell last month amid concerns over a worsening global PC slump.
As more consumers check e-mail, browse the Web and watch television and movies on smartphones and tablets, PC shipments plummeted 14 percent in the first quarter, the worst decline since researcher IDC began tracking data in 1994.
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