The special committee of the Board of Dell Inc. (NASDAQ:DELL) said that it will not be able to approve the latest proposal given by Carl Icahn according to which Dell should pursue a self tender for its shares of about $16 billion.
Why present proposal is not viable?
The special committee said that it cannot endorse the proposal of Carl Icahn at present neither can it implement it. The reason being there is no financing, no commitment from any party to participate, no solution for the company and the shareholders if the transaction fails to complete for any reason.
Roubaix Composite February 2021 Net Return +7.87%; YTD Net Return +11.34%
The February 2021 monthly tearsheet for the Roubaix Fund Composite, a fundamental long/short equity strategy focused on small and mid cap U.S. stocks. Q4 2020 hedge fund letters, conferences and more Roubaix Composite Performance Roubaix generated a net return of +7.87% in February relative to the long-only benchmark Russell 2000 Index total return of +6.23% Read More
The proposal of Carl Icahn also does not give any solution for the liquidity issue along with the risks which were put forward by the committee.
Earlier Proposal Of Carl Icahn
The special committee said in a press release that it is going through the proposal presented by Carl Icahn. The previous proposal of Carl Icahn was a buyout at $15.00 per share. Under this plan, assuming all the shareholders except Carl Icahn and Southeastern Asset Management tender their shares, will equate the dividend of approximately $10 per share and not the $12 per share, which was mentioned in the Icahn’s letter of May 9.
Future course of action
According to the committee it has already been over a month since the financial and other information were asked from Mr. Carl Icahn and Southeastern regarding the recapitalization idea. However, those requests remain pending. Any information provided by Carl Icahn will be taken into consideration by the Committee. The Special committee has decided that the fully financed $13.65 per share cash sale transaction will be implemented in case there comes no such proposal, which can be implemented or which can create value to shareholders.
Carl Icahn Increases Stake
Billionaire investor Carl Icahn holds 8.68 percent stake in Dell according to amended 13D. Icahn declared on Tuesday that he has acquired half of the Dell Inc. (NASDAQ:DELL) stake that was owned by Southeastern Asset Management Inc, a company, which is Icahn’s partner in the Dell Inc Quest. Purchasing half of the share means that Icahn has owned around 72 million shares at $13.52 per share, which means that he now holds more than 8 percent stocks of Dell and has become the second largest stockholder in the company. Prior to the purchase by Carl Icahn, Southeastern was the second largest holder.
Carl Icahn is the only man who is making it tough for Michael Dell to make a deal and buy his company after Icahn acquired around $1 billion of shares.
Michael Dell and other related parties own 16 percent stake in the Dell Inc. (NASDAQ:DELL).