Carl Icahn is unlikely to follow through on a preliminary offer
he made last month to take control of Dell Inc. (DELL), and will
instead consider a potential hostile bid, a person familiar with
the investor's thinking said Friday.
Mr. Icahn had been working on an offer in which he would buy up
to 58% of Dell, leaving the rest in the hands up public
shareholders. Now, Mr. Icahn will likely wait for the outcome of a
shareholder vote on the $24.4 billion leveraged buyout Dell inked
in February with founder Michael Dell and Silver Lake Partners. If
shareholders shoot that deal down, he may pursue a hostile bid for
the company, said the person familiar with his thinking.
If shareholders approve the Silver Lake deal, that would leave
Mr. Icahn--with a 4.6% stake in the company as of Monday--out of
the bidding.
A special committee of Dell directors said last month it would
consider Mr. Icahn's bid if he presented a firm offer, and that Mr.
Icahn's proposed offer could be superior to the $24.4 billion
leveraged buyout by Silver Lake and Mr. Dell.
On Thursday, the other potential counter bidder for Dell,
private-equity firm Blackstone Group LP (BX), dropped its pursuit
of Dell, citing weak PC sales and the company's "eroding financial
profile."
Dell agreed to pay Blackstone up to $25 million in costs to
study a bid for the company. Mr. Icahn declined the same offer to
keep open the option of an unsolicited approach.
Write to Sharon Terlep at sharon.terlep@wsj.com
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