--Icahn Offers $15 a share
--Mr. Icahn's offer includes total $5 billion equity
commitment
--Shareholders could choose between stock in new company or
cash
(adds details, updates share price)
By Tess Stynes
Dell Inc. (DELL) has received two alternative takeover
proposals--one from activist investor Carl Icahn and the other from
a private equity fund managed by Blackstone Group LP (BX)--that a
special board committee said may result in superior proposals to
the one offered last month by founder Michael Dell.
Mr. Dell, whose offer of $13.65 a share values the struggling
computer maker at more than $24 billion, has said he is willing to
explore in good faith the possibility of working with third parties
on the alternate takeover proposals. His offer, which included a
"go-shop" provision that allowed the company to solicit higher
offers, was made in conjunction with investment firm Silver Lake
Partners.
The founder's bid faced opposition from the start from several
large shareholders who argued it undervalues the company.
The offer from Mr. Icahn, who also disclosed about a 4.6% stake
in Dell, includes a total $5 billion equity commitment. He is
offering to purchase $2 billion of the surviving firm's shares for
$15 apiece as well as offer an additional $2 billion of cash equity
financing, in addition to shares he and his firm already own.
Shareholders would be have a choice of receiving shares in the
new Dell on a one-to-one basis or $15 a share in cash. The
potential payout to shareholders could be as much as a combined
$15.65 billion, with shares being accepted on a pro-rated basis, if
the shares tendered exceeds that amount.
Major holders such as Icahn Enterprises (IEP), Southeastern
Asset Management Inc. and T. Rowe Price Group Inc. (TROW) would see
shares rolled over into the new company.
If all eligible shares are tendered to the offer, Mr. Icahn and
his associates would have a stake of roughly 24.1% in the new
company.
Mr. Icahn and his associates aid they would be willing to
provide an additional $2 billion equity investment in the event
that major shareholders don't agree to rollover their existing
shares into the new company.
Meanwhile, the group led by Blackstone Management Associates is
offering to acquire Dell for $14.25 a share in cash or stock and
said existing shareholders would have the opportunity to remain on
board. It said it would fund the deal with a combination of equity
and debt financing. The offer expires at 5 p.m. EDT Thursday.
Blackstone and Mr. Icahn expressed interest in the computer
maker before a key deadline for offers expired Friday, with each
notifying the special committee that they were working on firm
bids, according to The Wall Street Journal.
The special committee, which is made up of four independent
directors, said it hasn't determined that either the Blackstone
proposal or the Icahn proposal in fact constitutes a superior
proposal to the existing merger agreement, and neither is
sufficiently detailed or definitive for such a determination to be
appropriate.
Dell shares were up 3.3% at $14.62 in recent premarket
trading.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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