Icahn opens door to Blackstone tie-up on Dell bid

Mon Mar 25, 2013 6:35pm EDT
 
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By Greg Roumeliotis and Soyoung Kim

(Reuters) - Two of the most prominent U.S. investors could upset Michael Dell's $24.4 billion buyout bid for Dell Inc, after billionaire Carl Icahn opened the door to an alliance with Blackstone Group to wrest control of the computer maker from its founder.

Icahn said on Monday he has started preliminary talks with Blackstone. Both sides have made bids that could be superior to the offer on the table from Michael Dell and private equity firm Silver Lake.

The backroom negotiations show how what started as Michael Dell and Silver Lake's plan to take the PC maker private could turn into a months-long process.

Icahn has proposed paying $15 per share for 58 percent of Dell. Blackstone has indicated it can pay more than $14.25 per share. The Silver Lake group offered $13.65 per share for all of Dell.

Dell and Silver Lake declined comment. Blackstone did not respond to requests for comment.

Icahn, who owns a $1 billion stake in Dell, said both his and Blackstone's offers give the company's largest investors what they wanted most - the ability to retain publicly traded shares of Dell.

Southeastern Asset Management, Dell's largest independent shareholder and one of the most vocal opponents of the Silver Lake plan, said it was pleased about that prospect, as well as the higher offers.

Another investor, Bill Nygren, co-manager of the Oakmark Fund, added, "Given the wide range of estimated values for Dell shares, if all else is nearly equal, we believe a proposal is superior if it allows investors who want to remain invested in Dell the opportunity to do so."   Continued...

 
Michael Dell Chairman and CEO of Dell Inc. arrives at the launch event of Windows 8 operating system in New York, October 25, 2012. REUTERS/Lucas Jackson