- 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
Warning: Expect Litigation
If Dell allows the buyout to move ahead, "we anticipate years of litigation will follow challenging the transaction and the actions of those directors that participated in it," Icahn said.
He said there will be questions about potential conflict of interest because of Michael Dell's ties to board members.
Dell's special board committee evaluating the options said it was "currently conducting a robust 'go-shop' process to determine if there are third parties interested in proposing alternative transactions," and would "welcome Carl Icahn and all other interested parties to participate in that process."
On Wednesday, the board defended the buyout plan as in the best interest of shareholders, but said it may continue looking at other offers past a March 22 deadline.
At least two major institutional shareholders have said they would vote against the plan.
Silver Lake Backs Buyout
The buyout plan is backed by equity investment firm Silver Lake and would include a $2 billion loan from Microsoft.
The move would delist the company from stock markets and could ease some pressure on Dell, which is cash-rich but has seen profits slump as it tries to reduce dependence on the shrinking market for personal computers.
Dell shares dipped 10 cents to end Thursday ay $14.22 as analyst comments on the situation were mixed.
Brian White at Topeka Capital Markets raised his target price to $18 a share, saying "too many forces are pushing toward a higher buyout price."
Jefferies analyst Peter Misek said he sees an agreement for the buyout at $15 a share.
"Our conversations with investors lead us to believe that most want a raised bid, but that they are also cognizant of the lack of competing bidders and of the secular headwinds facing Dell's PC business," Misek said in a note to clients.
"We also think Icahn could be satisfied with a raised bid."
Copyright Agence France-Presse, 2013
