Carl Icahn and Southeastern Asset Management in New Dell Counteroffer

Michael Teague  |

Michael Dell and Silverlake Management’s ongoing attempts to take the PC maker Dell, Inc. (DELL) private in a $24.4 billion buyout deal took another turn on Friday as Southeastern Asset Management and activist investor and billionaire Carl Icahn announced yet another counter-proposal.

Dell, the company’s founder, and Silverlake are currently offering investors $13.65 per share for the buyout. Icahn, whose previous counter-offer was $15 per share, already owns about 4.5 percent of the company’s stock, while Southeastern has an 8.2 percent position in the company.

Today the two offered shareholders to retain their equity in the company, along with either $12 per share in cash, or $12 worth of stock valued at $1.65 per share.

A letter signed by both Icahn and Southeastern’s president G. Staley Cates, Icahn took an unequivocal stance, saying “It is insulting to shareholders’ intelligence for the board to tell them that this board only has the best interests of shareholders at heart, and then accept Michael Dell’s offer to purchase the company he founded for $13.65 per share, a price far below what we consider its value to be”.

The pair has said that they themselves would take shares over cash, and would finance the deal partly out of their own money as well as taking on some $5.2 billion in debt.

A spokesman for Dell said that Southeastern’s proposal was under review.

Dell, still one of the world’s largest PC makers, has struggled along with the rest of the PC industry as mobile devices and cloud services continue to more or less overrun desktop and laptop computers. Blackstone Management, with whom Icahn had partnered to make his previous offer, eventually pulled out of the bidding process due to concerns over the ailing PC market.

Michael Dell has sought to take his creation private in an attempt to have more direct control over the company’s turnaround strategy. Icahn and Southeastern, meanwhile, with their combined 13 percent stake, have threatened to propose their own 12-member board of directors if the current one doesn’t recommend today’s proposal.

Dell’s shares were up 1.2 percent in midday trading, to $13.51 per share.

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