Carl C. Icahn Issues Open Letter
To Stockholders Of Dell: No-Brainer At Dell
NEW YORK, July 11, 2013
/PRNewswire/ -- Carl C. Icahn and his affiliates today issued the
following open letter to stockholders of Dell Inc.
Dear Fellow Dell
On rare occasions in
investing, one comes across situations that are "no-brainers." In these
situations the odds are greatly in your favor of making a profit while
taking very little risk, and in some very rare situations, you can make a
profit while taking no risk at all. Strangely, in my experience many
investors miss the opportunity to take advantage of these situations.
When I first started
Icahn & Co. in 1968 I discovered that you could purchase convertible bonds
in companies and sell short the stock they converted into. If the market
declined precipitously, the stocks you shorted would go down but the bonds
would stop declining and trade as bonds. Few investors set up this
riskless arbitrage because no one thought the market would go down enough
to make a profit on the bonds. But the market crashed in 1969, and Icahn
& Co. made 10 times its capital in its first year of existence.
Throughout my career
I have constantly been on the lookout for situations where risk is very
negligible compared to the reward. I believe that today a "no-brainer"
exists at Dell. This is because if you own Dell and opt for appraisal
rights, you have a rare opportunity to make a profit without taking risk.
Under the law, if you are dissatisfied with the price that you are being
forced to take in a "going private" transaction that you did not vote for,
you can go to court for an appraisal. The reason that doing this is a
"no-brainer" is because the law allows you to change your mind up to 60
days after the transaction is consummated. All you have to do is notify
Dell before the vote that approved the transaction.
In the case of Dell,
even if the Michael Dell/
Silver Lake offer of $13.65 is
accepted by shareholders on July 18, Dell
has indicated that the merger is expected to be consummated around
October. If that is the case, and if you opt for appraisal, you will have
until December to decide if you want the $13.65
or continue on with the appraisal process. You therefore have a free put
under this example until December. You always have 60 days from the actual
date that the merger is consummated to change your mind.
As in all
"no-brainers", while there is no risk, it does not seem likely that you
will make a profit either, so why bother -- but appearances can be
deceiving. On occasion these "no-brainers" make profits and sometimes
huge ones. In the case of Dell, a great many things can occur between now
and December to make this trade profitable. For one thing, Dell may want
to settle with those seeking appraisal rights. Another possibility is
that Dell paints a much rosier picture of the company's prospects when the
approximately $16 billion loans that Michael
Lake need are being syndicated. We believe this will make
it apparent that the company is worth far more than
$13.65 and that can be taken advantage of to fight for a premium
well over $13.65. But remember, in order
to take advantage of appraisal you must notify Dell of your intention to
do so before the vote on the merger and you must not vote for the merger.
If you don't do both of those things you cannot take advantage of the
benefit of the "no-brainer" if that benefit becomes available.
In case you are
interested, yesterday we opted for appraisal on the approximately 152
million shares that we own and we are in the process of delivering the
applicable documents. You should be aware that you have only a few more
days to exercise your appraisal rights.
THE PROCESS TO SEEK
APPRAISAL RIGHTS TAKES TIME, SO ACT NOW IF YOU WISH TO PERFECT YOUR
APPRAISAL RIGHTS AND IMMEDIATELY CONTACT YOUR BROKER AND OTHER ADVISORS. If
you have any questions concerning appraisal rights or wish to seek help or
information regarding appraisal rights, contact
D.F. King & Co., Inc.
at 1-800-347-4750 or email@example.com.
They will take your information and provide it to people at Icahn who
will call you back.
For a detailed
discussion of the process for perfecting and exercising appraisal rights,
see page 180 of the Definitive Proxy Statement on Schedule 14A filed by
Dell with the SEC on May 31, 2013.
We urge stockholders
not to vote for the Michael Dell/Silver
Lake transaction. And we urge those that are not voting for
the transaction to take advantage of the "no-brainer." In our opinion
this approach gives you two chances to win, THE FIRST CHANCE, and
the one that we desire to have happen, is that the Michael Dell/Silver
Lake transaction is defeated, in which event we will move on to the annual
meeting, giving stockholders the opportunity to elect our slate of
directors and have the benefit of our previously described
$14 Dell self tender proposal. THE SECOND
CHANCE comes if the Michael Dell/Silver
Lake transaction is approved by the other stockholders and
is consummated, in which event you will at least have a shot at the
"no-brainer". Why miss that opportunity to have a second bite at the
Carl C. Icahn
Icahn Enterprises, L.P.
NOTICE TO INVESTORS
SECURITY HOLDERS ARE
ADVISED TO READ THE PROXY STATEMENT, DATED JUNE 26,
2013, AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY
ICAHN ENTERPRISES, LP, SOUTHEASTERN ASSET MANAGEMENT, INC. AND THEIR
RESPECTIVE AFFILIATES FROM THE STOCKHOLDERS OF DELL INC. FOR USE AT DELL
INC.'S SPECIAL MEETING OF STOCKHOLDERS SCHEDULED TO BE HELD ON
JULY 18, 2013 BECAUSE THEY CONTAIN IMPORTANT
INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH
PROXY SOLICITATION. A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY HAVE
BEEN MAILED TO STOCKHOLDERS OF DELL INC. AND ARE ALSO AVAILABLE AT NO
CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH
PROXY SOLICITATION IS CONTAINED IN THE DEFINITIVE PROXY STATEMENT, DATED
JUNE 26, 2013. EXCEPT AS OTHERWISE DISCLOSED
IN THE DEFINITIVE PROXY STATEMENT, THE PARTICIPANTS HAVE NO INTEREST IN
DELL INC. OTHER THAN THROUGH THE BENEFICIAL OWNERSHIP OF SHARES OF COMMON
STOCK OF DELL INC. AS DISCLOSED IN THE DEFINITIVE PROXY STATEMENT. WE
HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD PARTY TO
INCLUDE THEIR INFORMATION IN THIS LETTER.
contained in this letter, and the documents referred to in this letter,
are forward-looking statements including, but not limited to, statements
that are predications of or indicate future events, trends, plans or
objectives. Undue reliance should not be placed on such statements
because, by their nature, they are subject to known and unknown risks and
uncertainties. Forward-looking statements are not guarantees of future
performance or activities and are subject to many risks and uncertainties.
Due to such risks and uncertainties, actual events or results or actual
performance may differ materially from those reflected or contemplated in
such forward-looking statements. Forward-looking statements can be
identified by the use of the future tense or other forward-looking words
such as "believe," "expect," "anticipate," "intend," "plan," "estimate,"
"should," "may," "will," "objective," "projection," "forecast,"
"management believes," "continue," "strategy," "position" or the negative
of those terms or other variations of them or by comparable terminology.
that could cause actual results to differ materially from the expectations
set forth in this letter include, among other things, the factors
identified under the section entitled "Risk Factors" in Dell's Annual
Report on Form 10-K for the year ended February 1,
2013 and under the section entitled "Cautionary Statement
Concerning Forward-Looking Information" in Dell's Definitive Proxy
Statement filed with the SEC on May 31, 2013.
Such forward-looking statements should therefore be construed in light of
such factors, and Icahn and Southeastern are under no obligation, and
expressly disclaim any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.
Carl C. Icahn
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