What is in this article?:
- Icahn Tells Dell Board He Opposes Buyout Plan
- Warning: Expect Litigation
- In a letter to Dell's board of directors, Carl Icahn reveals holding a stake in the company
- Icahn says buyout deal undervalues Dell and is "not in the best interests" of shareholders
- Icahn proposes special divident payment to shareholders
- Two institutional investors have said they oppose the plan.
- Equity investment firm backs the buyout
NEW YORK -- Dell's plan for a private equity buyout ran into a potential snag Thursday as corporate raider Carl Icahn revealed that he has a stake in the computer giant and is opposing the deal.
Icahn, in a letter made public by the company's board of directors, said the plan to take the company private in a $24.4 billion buyout led by founder Michael Dell "is not in the best interests of Dell shareholders and substantially undervalues the company."
The investor known for moves on companies ranging from MGM to Yahoo! said that Dell (IW 500/20), instead of going private, should make a special dividend payment to shareholders by using cash, assets or by borrowing.
This plan would give Dell shareholders 67% more than the offer of $13.65 per share.
"We see no reason that the future value of Dell should not accrue to ALL the existing Dell shareholders -- not just Michael Dell," Icahn said in the letter.
Icahn said his investment firm had taken a "substantial" stake in Dell, without elaborating. CNBC television reported the stake to be around 6%.