--Billionaire investor agrees to restrictions on his stake in
company
--Deal allows Icahn to partner up more easily
--Dell board committee says terms boost "chances of eliciting a
superior proposal"
(Adds additional background on buyout offer, other potential
bidders.)
By Drew FitzGerald and Saabira Chaudhuri
Activist investor Carl Icahn agreed to limit his potential stake
in Dell Inc. (DELL) in exchange for more leeway to team up with
other bidders.
Mr. Icahn, who currently owns nearly 5% of Dell, agreed to
refrain from taking a stake of more than stake in the
personal-computer maker as the company's takeover process unfolds,
Dell said Tuesday. The agreement, which applies to Mr. Icahn's
affiliates, also prevents him from teaming up with other
shareholders if the group as a whole would own more than 15% of
Dell's shares.
In exchange, the Round Rock, Texas, company gave Mr. Icahn a
waiver on certain corporate rules that Dell said will make it
easier for him to engage with other shareholders. Mr. Icahn wasn't
immediately available for comment.
The special committee Tuesday said it believed relaxing
restrictions on Mr. Icahn, such as limits on investor proposals,
would "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 in mid-February revealed plans for a controversial $24.4
billion takeover led by its founder, Michael Dell, and investment
firm Silver Lake Partners. Competing bids from Mr. Icahn and
Blackstone Group LP (BX) emerged during the subsequent "go-shop"
period.
The Dell special committee said it determined that the proposal
by Mr. Icahn, who has publicly criticized Silver Lake's offer,
could "reasonably be expected" to result in a superior
proposal.
The agreement with Mr. Icahn will lapse after Dell closes a deal
with its founder-led buyout team or consummates a superior
alternative transaction. Otherwise, the pact would expire on Jan.
15, 2014.
Dell shares recently traded 5 cents higher at $14.09, above the
$13.65 offered by Mr. Dell's buyout team but below the potential
offer from Mr. Icahn, which could go as high as $15 a share.
Write to Drew FitzGerald at andrew.fitzgerald@dowjones.com.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires