Dell Committee Asks Carl Icahn For Additional Information

By Mani
Updated on

The Special Committee of the Board of Directors of Dell Inc. (NASDAQ:DELL) sent a letter to Carl Icahn and Southeastern Asset Management Inc., for more information on last week’s takeover proposal, according to Reuters.

Dell Committee Asks Carl Icahn For Additional Information

Letter To Carl Icahn

In its today’s letter, the Special Committee requested additional information from the activist investor Icahn and Southeastern Asset management relating to the proposed leveraged recapitalization transaction submitted to the Special Committee on May 9, 2013. This is as part of the Special Committee’s thorough review of the proposed transaction.

In its letter addressed to Mr. Carl Icahn and Mr. G. Staley Cates, the Special Committee indicated it isn’t clear whether the offer is an “actual acquisition proposal” or an alternative that should be considered if a pending sale to Silver Lake Partners and founder Michael Dell isn’t approved.

The letter further indicated that in order for the Special Committee of the Board of Directors of Dell Inc. (NASDAQ:DELL) to evaluate the transaction they have proposed and potentially negotiate terms which could cause it to constitute a Superior Proposal within the meaning of the pending Merger Agreement, the Committee would need certain clarifications and additional materials.

Late last week, Mr. Icahn and Southeastern proposed an alternative offer to a $24.4 billion deal to buy out Dell public stockholders, saying they propose giving Dell shareholders the option to keep holding stock in the company, and take an additional $12 a share in cash or stock. The cash-or-stock dividend would cost more than $21 billion.

The Special Committee sought draft of the definitive agreement pursuant to which the transaction would be effected.  In its letter, the Special Committee also requested Mr. Icahn and Southeastern to provide comprehensive information regarding the proposed financing for the transaction as it needs to understand the terms of the debt financing, and contingencies available if cash on hand or stockholder rollovers are less than anticipated. Besides the Special Committee also sought the drafts of forms of commitment papers (and any proposed bridge facility) so that it can assess the certainty of closing.

Further the committee also asked for information about arrangements to provide working capital or other liquidity following the closing, and who the senior management team would be.

Last week, Mr. Icahn said Mr. Dell was no longer the right person to lead the company.

In the premarket trading, shares of Dell edged up by a penny to $13.46. Dell Inc. (NASDAQ:DELL) shares rose by over 33 percent so far this year.

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