Dell Inc. (NASDAQ:DELL) continues to be a source of controversy in the investment world, and now activist investor Carl Icahn has apparently taken an interest. CNBC reports that he has bought up to a 6 percent stake in the company, which could amount to almost 100 million shares.
Currently Dell Inc. (NASDAQ:DELL)’s founder Michael Dell is heading up a leveraged buyout deal, with the company’s special committee officially endorsed earlier today. Southeastern Asset Management, one of Dell’s largest outside shareholders, has said it would oppose the buyout deal, and now with Icahn stepping into the fray, Dell has another major outside shareholder to contend with over the deal.
CNBC cites anonymous sources who say Icahn will file a 13D on Dell “very soon” and that he has purchased his shares of the company within the last two weeks. The stock is already trading above the proposed price of the buyout deal, which is $13.65 per share. Shares of Dell Inc. (NASDAQ:DELL) rose another 2 percent after CNBC reported that Icahn was getting involved.
The network contacted Icahn for comment, but he said he wouldn’t discuss Dell “or any rationale he had for the investment.” CNBC does cite sources who said Icahn has already had meetings with some of the company’s special committee advisors and that he urged them to opt for a leveraged recap instead of the proposed leveraged buyout being spearheaded by the company’s founder.
The advisors reportedly asked Icahn to sign a confidentiality agreement and become part of the go-shop process the special committee is currently conducting. However, he has not apparently done that yet.
CNBC speculates that Icahn will join Southeastern in opposing the deal and arguing that the company lever up its balance sheet and offer a hefty one-time special dividend. The buyout deal won’t go forward unless the majority of the shares not owned by Michal Dell to vote in favor of it. With Icahn potentially adding his shares with Southeastern’s shares in opposition to the buyout, it’s looking less likely that the deal will happen.