Dell's Board of Directors Snubs Icahn Bid

Dell HQA special committee of the board of directors of Dell Inc. (NASDAQ: DELL) this morning recommended that the company's shareholders accept the merger agreement being offered by founder and CEO Michael Dell and Silver Lake Partners.

The committee essentially rejected a proposed offer from activist investor Carl Icahn because the offer may be insufficiently capitalized. A souring market for personal computers coupled with the risks associated with Dell's transition to an enterprise solutions business led the committee to conclude that the Dell/Silver Lake offer was superior.

Michael Dell and Silver Lake have offered $13.65 a share in cash in a deal valued at $24.4 billion. Icahn's offer included a $12 per share special dividend, boosting the potential per share offer by about $10 a share.

The board's committee noted a "significant liquidity gap in the recapitalization proposed by Icahn/Southeastern that could reduce the promised $12.00 per share special dividend to $9.35 per share - and to $8.50 per share if Icahn/Southeastern are the only shareholders electing the equity stub instead of cash."

In a presentation filed with the Securities and Exchange Commission, the board's committee noted that Icahn and Southeastern Asset Management did not provide details of their offer and projected a $3.9 billion funding shortfall.

Dell's shares are trading fractionally higher in the first half hour this morning, at $13.43 in a 52-week range of $8.69 to $14.64.

Filed under: 24/7 Wall St. Wire, Activist Investor, Corporate Governance, Mergers & Acquisitions, Mergers and Buy Outs, PC Companies, SEC, Shareholder Issues, Technology Companies Tagged: DELL
Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.