Menu
Dell, Icahn in confidentiality agreement as buyout opposition grows

Dell, Icahn in confidentiality agreement as buyout opposition grows

Carl Icahn, who is opposing Dell's $US24.4 billion buyout, will get access to Dell's confidential information

Dell on Monday said it had signed a confidentiality agreement with investor Carl Icahn, who has vocally opposed the company's proposed plan to be acquired for US$24.4 billion in a leveraged buyout.

In a brief statement, Icahn Enterprises said it "looks forward to commencing its review of Dell's confidential information."

Further details were not provided on what information would be reviewed, but it is likely that Icahn will get a look at Dell's accounting books. Icahn on March 7 proposed that Dell pursue a leveraged recapitalization and a special dividend of $9 per share if the buyout deal was rejected by shareholders. In a leveraged recapitalization, a company typically takes on debt in order to pay a divident to shareholders.

Dell spokesman David Frink said there was nothing to add, saying that the company is trying to be as transparent as possible through filings with the U.S. Securities and Exchange Commission.

Dell on Feb. 5 announced it was being purchased for $24.4 billion by founder Michael Dell and equity investor Silver Lake. The deal, subject to shareholder approval, also included a $2 billion loan from Microsoft, and debt financing commitments from Bank of America, Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets.

Shortly after announcing the deal, Dell said it did its due diligence and examined its strategic position and alternatives with the help of experts. Dell's board of directors ultimately concluded that "that the proposed all-cash transaction is in the best interests of stockholders. The transaction offers an attractive and immediate premium for stockholders and shifts the risks facing the business to the buyer group."

But there are signs that the deal could be at risk as many top Dell shareholders are against the proposed buyout.

Icahn and some of Dell's major shareholders, including Yacktman Asset Management and Southeastern Asset Management have voiced their opinions against the proposed deal, saying that the company is being undervalued. The stockholders are preparing to fight a proxy battle and will vote against a proposed deal.

Dell is going through a "go-shop process" of 45 days in which stockholders get an opportunity to determine if there are alternatives better than the proposed deal on the table. The go-shop period ends on March 22. Negotiations will continue after that date if there is a superior proposal to the current buy-out plan by Michael Dell and Silver Lake.

Dell will file a proxy document with the SEC in a week or so that will provide in-depth details related to any new proposals and the current proposed deal, Frink said.

Icahn is widely considered an opportunist investor and has opposed many deals involving technology companies. Icahn dueled with Yahoo's board in 2008 after the company rejected a buyout offer from Microsoft.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsbusiness issuesDell

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments