Feeds

Carl Icahn may be planning to block Dell buyout

Has gobbled up 100 million shares in two weeks

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

A new potential opponent to the proposed leveraged buyout of Dell by founder Michael Dell has emerged, in the form of none other than corporate raider activist investor Carl Icahn.

On Wednesday, the special committee of Dell's board appointed to investigate the deal declared that selling the company would be the best option for its investors, despite the objections of Southeastern Asset Management (SAM), Dell's largest single shareholder.

But CNBC now reports that Icahn, who has reportedly been buying up Dell shares over the last two weeks, also opposes the $13.65-per-share buyout. He has already met with advisors to the board's special committee to propose a rather different course of action.

According to sources, the former junk-bond juggler is likely to propose an alternative leveraged recapitalization plan that would pay shareholders – not least of which, Icahn himself – "a significant one-time dividend."

The special committee had reportedly considered a leveraged recap among various other options but rejected the idea as being too risky.

Whether Icahn actually has enough clout to pull off such a maneuver is unclear. But those same Wall Street gossips say his recent buying spree may have already amassed him a position close to 100 million Dell shares, which would give him approximately 6 per cent ownership of the company.

If that is the case - and Icahn teams up with SAM to oppose the current plan - their combined 14.4 per cent stake in the company could give them enough influence to convince a significant number of shareholders to join their cause.

Another large shareholder, T. Rowe Price, has also publicly opposed the proposed leveraged buyout plan, according to The New York Times.

But rejecting the buyout would require a vote by the majority of shares not currently owned by Michael Dell, and Dell is believed to control as much as 16 per cent of the outstanding issue – although he will not get to cast a vote himself.

Icahn has built a reputation for manipulating companies for his own short-term gain, beginning with his hostile takeover of TWA in 1985. The airline was carrying nearly half of all trans-Atlantic passengers at the time, but it was forced into bankruptcy seven years later.

If investors were worried about Icahn's involvement with Dell, however, they didn't show it. The company's shares were up 1.8 per cent by the closing bell on Wednesday, and crept up further in after hours trading. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.