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Icahn reveals board nominees if bid succeeds

Reuters/ AFR | May 14, 2013
Dell special board committee asked activist investor Carl Icahn for details of his plan to buy the computer maker, including how he would finance a cash payout to shareholders and who would run the company if his preferred slate of board directors was installed.

Icahn is being advised by investment bank Jefferies Group.

In a letter to Icahn, the committee said it was not clear if he intended to make "an actual acquisition proposal that the board could evaluate," or if he intended his offer as an alternative in the event the pending sale to Silver Lake and Michael Dell is not approved.

Dell shares ended regular trading on Monday at $US13.52, up 7 cents.

Icahn and Southeastern's challenge comes after Blackstone ended its pursuit of Dell in April and pulled out a month after it teamed up with Icahn to challenge the take-private attempt.

Icahn argued in a letter sent to the board and made public in a filing on Friday that Dell operates a large enterprise-focused computing business in addition to its ailing PC division, with strong ties Microsoft and Intel.

Without specifying details, he also said cost savings could be had from merging assembly plants across the world, while there remained opportunities to spin off non-core businesses.

Apart from asking who would make up the company's senior management team under Icahn, the committee said in its Monday letter that it wanted to know his "strategy and operating plan."

The committee also asked for information on the terms of the debt financing required for Icahn's proposal and "contingencies available if cash on hand or stockholder rollovers are less than anticipated," as well as financing commitment letters.

It said the proposal did not seem to take into account the additional borrowing required if Icahn uses the company's cash in the transaction and reduces future cash flow by selling receivables. In addition, it asked for an analysis of whether the receipt of additional shares would be taxable.

It also wanted to know more about the relationship between Icahn and Southeastern.

Icahn was not available for comment.

Both Icahn and Southeastern said they would finance the proposal from existing cash and about $US5.2 billion in new debt.

Icahn and Southeastern together hold about 13 per cent of Dell stock. The billionaire investor previously proposed paying $US15 per share for 58 per cent of Dell.

 

 

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