THE WALL STREET JOURNAL.
Updated April 5, 2013, 9:23 p.m. ET
Icahn Says Proxy Fight
Remains Possible for Dell
Carl Icahn said he is still considering a proxy fight to force
Dell Inc. to pay a large dividend, even as a board committee asked him
to waive that right and make a formal bid to buy the company.
special committee of the computer maker Friday night released a letter it
sent the billionaire activist investor raising concerns about his threats to
keep the board's directors in "years of litigation" and launch a proxy
Mr. Icahn, the letter says, has
requested to be reimbursed the cost of doing due diligence on Dell, a
condition that bidding groups led by Silver Lake Partners and
Blackstone Group LP have both been afforded. Those two will be paid up
to $25 million for their expenses, according to filings.
the Dell committee is balking at Mr. Icahn's request for the same treatment
because of his previous threats, saying it will reimburse him the funds only
if he "will commit contractually to work within our process." That would
include dropping the threat and the right to "subvert" the ongoing sales
process with a proxy fight or litigation, the committee wrote.
Icahn, who holds 4.6% of Dell, said in an interview he is still exploring an
earlier proposal that called for a dividend instead of a buyout, which would
require a proxy fight, even as he's made a preliminary bid to buy up to 58%
of the company.
does using up corporate funds to pay me to walk away from an offer that the
board doesn't like, but that shareholders may, help other shareholders," Mr.
Icahn said. "No matter how much they are willing to pay to reimburse me I'm
not going to give up the right to put in a bid that I think will be
compelling to shareholders, even if the board doesn't like it."
But while Mr. Icahn is undergoing
due diligence, he has yet to engage in talks with
Michael Dell, people familiar with the matter have said. Blackstone,
meanwhile, has had several meetings with the founder and CEO during its due
diligence, other people have said.
Icahn and Blackstone both submitted preliminary proposals during that
go-shop period that the special committee has said could be considered
superior to the Silver Lake offer. Blackstone offered at least $14.25 a
share to buy all of Dell, though it will allow a certain number of
shareholders to continue to hold shares if the holders want to. Mr. Icahn
later said he would also consider working with Blackstone on their deal.
remains unclear if Mr. Dell and Blackstone will come to an agreement and it
also is unclear if Blackstone or Mr. Icahn will provide a formal offer that
the special committee believes is better than the agreed-upon deal. The due
diligence for Blackstone and Mr. Icahn is expected to take several weeks.
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version of this article appeared April 6, 2013, on page B4 in the U.S.
edition of The Wall Street Journal, with the headline: Icahn Says Proxy
Fight Remains Possible for Dell.
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