By JOSH KOSMAN and MARK DECAMBRE
Last Updated: 12:58 AM, May 6, 2013
Posted: 10:18 PM, May 5, 2013
Carl Icahn is not done with
The activist is preparing
to team up with Southeastern Asset Management, the PC-maker’s largest
independent shareholder, in the next week in a push to get directors
onto the tech giant’s board, two sources close to the situation said.
The move is expected on or
before May 13, the deadline to launch a proxy contest before this
summer’s still-unscheduled annual meeting, the sources said.
Such an action by the two
could be a prelude to them calling on the ailing tech firm to sell
parts of the business and to pay shareholders a dividend by
repatriating some of the $9 billion in cash it has sitting offshore,
Icahn and Southeastern have
been down that road before. Last year both backed a similar move when
they nominated directors at Chesapeake Energy, one of the sources
In May 2012, Icahn sent a
letter to Chesapeake proposing four new directors. Two would be picked
by him and two by Southeastern.
Icahn also called on
Chesapeake to stop spending on noncore assets.
At the center of the battle
is a move by company founder and CEO Michael Dell and Silver Lake
Partners to buy the business for $13.65 a share, or $24 billion.
Icahn then made a
competing, non-binding offer to buy 58 percent of Dell. The board said
it would consider it.
Dell offered to pay Icahn
$25 million to cover his expenses so he could do enough homework to
make a binding offer – if, in exchange, the New York billionaire
agreed not to launch a proxy fight, one of the sources said.
Icahn bristled at the offer
– and turned it down, the source said.
Dell’s entire 12-member
board is up for re-election. One member, James Breyer, head of its
finance committee, said last week he would not stand for re-election.
Icahn has some ammunition
in criticizing the board, sources said.
The board has faced
criticism for letting Michael Dell structure a leveraged buyout
without facing competition — and then only allowing competing bids
during a 45-day go-shop period.
Dell will give Silver Lake
Capital a $185 million break-up fee if it turns down their offer,
giving them an advantage over rivals.
The Blackstone Group
considered making a bid but backed off, saying it was misled as to how
steep global PC sales were falling off. But before it backed out,
Michael Dell had approached Blackstone to see if he could run the
company should its prospective bid win the day, according to a public
This is despite Michael
Dell agreeing previously to give voting support behind any proposal
superior to his own.
Icahn and Southeastern
declined to comment; and Dell Inc. did not return calls.
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