By Melodie Warner
Activist investor Carl Icahn looked to dispel Monday what he
called a "scare tactic" by Dell Inc. (DELL), saying he expects the
ailing PC maker to promptly hold an annual meeting in the event the
proposed $24.4 billion buyout offer from the computer maker's
founder is voted down at Thursday's shareholder vote.
In a letter to Dell shareholders Monday, Mr. Icahn again asked
shareholders to reject the deal said it is "another scare tactic of
Dell" to tell investors the stock price will drop because of the
gap period between Thursday's vote and the proxy fight at the
annual meeting because the law requires that Dell hold a
stockholder meeting by Aug. 14.
A representative from Dell wasn't immediately available for
comment.
Mr. Icahn also said "it makes no sense to believe stockholders
will vote to elect the current board with their abysmal record and
turn down our recap offer of $15 to $18 per share unless the
current board makes a superior recap offer."
Mr. Icahn has raised more than $5 billion to finance his plan to
recapitalize Dell and last week, he enhanced his bid by adding a
warrant component. Mr. Icahn reaffirmed his call for the company to
launch a tender offer for 1.1 billion shares at $14 each, and added
a warrant for every four shares tendered, giving shareholders the
future right to purchase additional shares of Dell under certain
conditions at $20 a share.
Mr. Icahn estimated the total value to tendering shareholders
would be about $15.50 to $18 a share, compared with the $13.65 a
share go-private offer from founder and chief executive Michael
Dell and private-equity firm Silver Lake Partners.
Mr. Icahn, Dell's second-largest shareholder behind Mr. Dell,
has repeatedly criticized the bid by founder and chief executive
Michael Dell and private-equity firm Silver Lake Partners, saying
the proposal undervalues Dell's shares.
However, shareholder-advisory group Institutional Shareholder
Services Inc., as well as Glass Lewis & Co. and Egan-Jones
Proxy Services, last week recommended Dell stockholders vote for
the buyout offer, improving the odds for Mr. Dell and Silver
Lake.
Dell shares closed Friday at $13.32 and were inactive premarket.
The stock is up 31% so far this year.
Write to Melodie Warner at melodie.warner@dowjones.com
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