Dell buyout hits another roadblock

Maverick investor Carl Icahn builds 6% stake, favours recapitalisation

Tags: Dell CorporationMergers and acquisitionsUSA
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Dell buyout hits another roadblock An ongoing shareholder revolt may see Dell remain a publicly traded company for some time. (Getty Images)
By  Stephen McBride Published  March 7, 2013

Carl Icahn, a maverick investor known for his demands for overhauls in companies' management, has amassed a 6% stake in Dell Inc, complicating Michael Dell's campaign to take private the company he founded in his college dorm room.

CNBC reported yesterday that Icahn is now in control of 100 million shares of the PC manufacturer and wants Dell to move towards a leveraged recapitalisation.

Icahn's haul positions him as the second largest outside shareholder behind Southeastern Asset Management, which holds an 8.5% stake. Southeastern was the first of Dell's shareholders to challenge Michael Dell's buyout offer of $13.65 a share, going so far as to write a letter to the board in early February, claiming the price should be closer to $24. Since then Dell shares have rallied and closed yesterday at $14.32.

Michael Dell had hoped to remove the company from public scrutiny, backed by his own 16% stake, a $1bn investment from Silver Lake Management LLC, a $2bn loan from Microsoft and debt with four different lenders. But opposition from Southeastern, Icahn and other prominent stakeholders is now likely to prevent the deal closing at the current offer price.

CNBC reported that Icahn had suggested Dell acquire debt of up to $9 billion and pay out a special dividend to shareholders.

1720 days ago
Vinod Mehra

This is the case study to watch out

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