Dell Inc, the personal computer maker facing mounting shareholder resistance to a proposed $24.4 billion leveraged buyout, will let billionaire Carl Icahn review its books as he pushes alternatives to the deal.
Icahn, who has amassed a stake in Dell and is urging the company to pay a special dividend of $9 a share, said in a statement on Monday that he signed a confidentiality agreement with Dell to examine information, without providing additional detail. David Frink, a spokesman for Dell, declined to comment beyond the public filing, and representatives for Icahn and didn't respond to requests for comment.
Dell's board is seeking bids higher than the $13.65 a share offer by Chief Executive Officer Michael Dell and Silver Lake Management LLC to take the company private. The deal - which requires approval from a majority of shareholders excluding CEO Dell - has been opposed by shareholders including Southeastern Asset Management Inc. and T Rowe Price Group Inc, who have said the price undervalues the company.
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.
'Classic auction'
"This opens up a host of possibilities," Sabino said in an interview. "Dell is fully in play. This is a classic auction."
Icahn said last week that he asked Dell's board to pledge that it will implement his dividend proposal if shareholders reject the Michael Dell-led offer. Otherwise, Icahn said he will 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 through March 22, and Dell said last week that it welcomes Icahn and other parties to participate in that process.
Dell rose 1.3 per cent to $14.34 at 12:56 pm in New York, signaling that investors anticipate a higher buyout offer. The stock had advanced 40 per cent this year through March 8, compared with an 8.8 per cent gain for the Standard & Poor's 500 Index.
