Sunday 24 September 2017

'Classic auction' now in play as Dell opens its accounts to Icahn

Lisa Rapaport

Computer giant Dell has agreed to open its books to billionaire shareholder Carl Icahn (right) as the takeover battle for the company heats up.

Dell employs more than 2,000 people in Ireland at major sites in Limerick and at Cherrywood in Dublin.

The PC maker is facing mounting shareholder resistance to a proposed $24.4bn (€18.7bn) takeover offer from founder and chief executive Michael Dell. He wants to regain control of the business.

Mr Icahn wants the company to pay a special dividend of $9 a share.

He said in a statement that he signed a confidentiality agreement with Dell to examine some of the company's information, without providing additional detail.

David Frink, a spokesman for Dell, declined to comment beyond the public filing, and representatives for Mr Icahn didn't respond to requests for comment.

Dell's board is seeking bids higher than the $13.65-a-share offer by Michael Dell and Silver Lake Management to take the company private.

The deal requires approval from a majority of shareholders, excluding Mr Dell himself. It has been opposed by shareholders including Southeastern Asset Management Inc and T Rowe Price Group Inc, who have said the price undervalued the company.

Mr Icahn's signing of a confidentiality agreement shows his intention to stay involved in the transaction until he's guaranteed a profit, said Anthony Michael Sabino, a professor at John's University's Peter J Tobin College of Business. He may attempt his own takeover or support a third-party bidder.

"Dell is fully in play. This is a classic auction," Mr Sabino said.

Mr Icahn said that he asked Dell's board to pledge that it would implement his dividend proposal if shareholders rejected the Michael Dell-led offer. Otherwise, Mr Icahn said he would start a proxy fight and seek to replace directors of the Round Rock, Texas-based company with his own candidates.

The so-called go-shop period for the company to seek higher bids runs until March 22, and Dell said last week that it welcomed Mr Icahn and other parties to participate in that process.

Dell rose 1.3pc to $14.34 in New York, signalling that investors anticipate a higher buyout offer. (Bloomberg)

Irish Independent

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