Carl Icahn phoned into Bloomberg Television’s “Street Smart with Trish Regan and Adam Johnson” and said: “We are going to be coming up with a higher bid tomorrow morning. A little bump on my part. That is what I am looking for…. We will add to that bid. We will warrant to that. The bid will be superior, even to what is already superior…We think it is worth more than $14.
We will do a warrant which is will be valuable. This is vastly superior to the Dell Inc. (NASDAQ:DELL) deal… We are going to come and add to the package which we think is superior already. We think that it will be around $20, buy the stock at 20 and we will give the shareholders a piece that warrant. We think that will make it utterly superior and we will go to the independent board. We will show them this and tell them that we think it is superior. This is our recommendation and we hope that it has traction.”
Carl Icahn said on Michael Dell
“Look at him, he is going in and catching a falling knife. He knows the company better than anyone. He is paying for it. I don’t think anybody would accuse him of doing this for charity or helping shareholders… Very often the founder of the company should not be running it later when it matures and I don’t think [Michael Dell] has done a good job and I think the board has been asleep on the switch. They should have held him accountable years ago. They have had a very poor performance. Instead of saying that you are out of here, they are going to reward him and give him this great bargain.”
Carl Icahn on what company Bill Ackman has his eyes on
“I hope it is not Herbalife Ltd. (NYSE:HLF)”
Carl Icahn on announcing a new higher bid for Dell tomorrow:
“We are going to be coming up with a higher bid tomorrow morning. A little bump on my part. That is what I am looking for. You are giving US $14. You have a 73-percent taking. I think this is superior to the $14.65. We will add to that bid. We will warrant to that. The bid will be superior, even to what is superior. We are giving $14. They are 75-percent. Then they will own the stub for 25-percent of the stock. We think it is worth more than $14. We will do a warrant which is will be valuable. This is vastly superior to the Dell Inc. (NASDAQ:DELL) deal…
We are going to come and add to the package which we think is superior already. We think that it will be around $20, buy the stock at 20 and we will give the shareholders a piece that warrant. We think that will make it utterly superior and we will go to the independent board. We will show them this and tell them that we think it is superior. This is our recommendation and we hope that it has traction. You cannot be sure, obviously, so, we will see what happens. So you heard it here first.”
Carl Icahn On why making a play for Dell is a no brainer:
“We look for these. In this case, if you go for the rights, you will have literally a free put until December they themselves have said that they will not be able to close this until sometime in October and even then, it might be optimistic. Therefore, if you go for appraisal rights, you have 60 days after the time it consummates to pull out if you want to. Sometimes, Good things happen and the company would want to get rid of these appraisal rights that make a different deal with you. Also, you might want to continue to go and get the appraisal rights adjudicated because I think that Dell Inc. (NASDAQ:DELL) is worth at more than the $13.60 Five cents that Michael Dell is offering.”
“[The board is] drinking the Kool-aid that Dell Inc. (NASDAQ:DELL) tells them. In the PC Area, this is the second change going on. Dell will be able to take advantage of that. That is why we have such a great record. You don’t have to look quarter-to-quarter. In fact, you don’t make money for that. Dell has made $14 Billion in acquisitions over the last few years. Dell is in a great position to take advantage of the secular change going on, in our opinion. At the risk of being modest, I have been right a lot more than I have been wrong. We bought oil at 2000 when nobody like it. I don’t have to prove my record.
Carl Icahn On whether he is taking a similar risk at Michael Dell going to a judge for appraisal:
“That’s right. Usually, the history of appraisal rights is that you get more. I want to make the point that you can make that decision sometime before the end of the year in my opinion. You don’t have to take the risk but you still might get the reward. That is why it is a great risk reward ratio. We have made fortunes over the year. It is amazing that a lot of people don’t do it because it does not appear obvious that you cannot possibly make money. You could do convertible bonds against the short position on stocks and you had no risk. When the market broke, you make a fortune. These are no-brainers. I will be talking about them from time to time and I mention them in my twitter account.”
Carl Icahn On appraisal taking a long time:
“There are a lot of smart professionals that do this and tie it up. I spoke to one this morning that is pretty big. They have done a great job. They have done a good job of going in and getting these appraisals. Especially in this case, which is unique. You have a company out there that is just badmouthing this company and is paying $13.65. If you really dig into it, I believe it is worth more than that. You could argue with that. They will pay you interest.
When the appraisal is done, I think you get about an eight-percent on that money. By the way, there are many banks that will loan you. That means that you don’t get liquidity. So, there was a lot of various guys that have made a great deal of money doing this. IN this case, it is a no-brainer because you don’t even have to do the appraisal, you can wait until December. So, that is why I say this is a good thing to do. I am not telling you go buy Dell Inc. (NASDAQ:DELL). I am not here to say go.”