By Saabira Chaudhuri
Dell Inc. (DELL) has struck a deal with Carl Icahn under which
the billionaire investor has agreed not to buy shares that would
give him a more than 10% stake in the PC maker as the company's
takeover process unfolds.
Dell unveiled in mid-February plans for a controversial $24.4
billion takeover by its founder and investment firm Silver Lake
Partners, and a competing bid from Mr. Icahn emerged during the
subsequent "go-shop" period.
The special committee said Tuesday it believes that granting a
limited waiver to Mr. Icahn while capping his share ownership will
"maximize the chances of eliciting a superior proposal" from Mr.
Icahn while also protecting shareholders against "potential
accumulation of an unduly influential voting interest."
Dell noted its special committee had determined that the
proposal by Mr. Icahn--the corporate raider who had acquired nearly
5% of Dell's stock and publicly criticized Silver Lake's
offer--could reasonably be expected to result in a superior
proposal.
The agreement, which applies to Mr. Icahn's affiliates, also
prevents Mr. Icahn from making deals with other shareholders who
together would collectively own more than 15% of Dell's shares. But
the limited waiver that facilitates his ability to engage with
other Dell stockholders.
The agreement with Mr. Icahn will expire when the Michael
Dell/Silver Lake Partners transaction is closed, when a superior
alternative transaction, or Jan. 15, 2014, whichever is
soonest.
Silver Lake and Mr. Dell unveiled their offer Feb. 3, aided by a
$2 billion loan from Microsoft Corp. (MSFT) and $13.75 billion in
new bank debt, launching the start of the "go-shop" period. That
window resulted in inquiries from several firms, though only
Blackstone and Mr. Icahn emerged with proposals Dell's board has
decided could become firm offers that could top Silver Lake's
standing bid.
Shares of Dell edged up 0.4% in recent premarket trading to
$14.10. The stock has dropped 13% in the past 12 months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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