Icahn reiterates commitment for Dell buy

Wed Jun 19, 2013 3:08pm EDT
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By Michelle Sierra

NEW YORK (Reuters) - Carl Icahn reiterated his interest in owning Dell Inc and said the $5.2 billion in financing he's putting together to back his bid for the company continues to move forward as planned. The comments came in a telephone interview Tuesday, echoing statements he made earlier in the day in an open letter to Dell shareholders.

"Nothing has changed regarding the financing," Icahn said. "We expect to have $5.2 billion in the next couple of weeks. Our investment bank is already committing $1.6 billion and my affiliates and I would provide $2 billion, if necessary."

Icahn's letter to Dell's shareholders comes on the heels of a series of reports that Icahn could exit the Dell race after struggling to raise the $5.2 billion in debt he needed to back a leveraged recapitalization he proposed to Dell's board on May 9.

In May, Icahn initiated talks with banks and asset managers to line up financing to back a leveraged recapitalization of Dell as an alternative to an existing buyout offer led by Dell and Silver Lake Partners for $13.65 a share, or $24.4 billion. Jefferies & Co, which has already committed $1.6 billion, is leading the deal.

Icahn's time is ticking. Next month the company's shareholders are expected to vote on whether to accept the Silver Lake bid. In order to prove his commitment is legitimate, Icahn needs to have the financing ready by then.

Though the letter offers little additional details about the progress of the financing, it signals a change in the activist investor's strategy.

Under the May 9 leveraged recapitalization plan, Icahn proposed giving shareholders the option of receiving either a distribution of $12 per share in cash or $12 per share in stock valued at $1.65 per share. Now, Icahn is asking that Dell shareholders agree to a tender offer for 1.1 billion shares at $14 apiece in a stock buyback.

Icahn and Southeastern, which together own about 13 percent of Dell stock, have argued that the Dell and Silver Lake offer of $13.65 undervalues the company and that the recent numbers reported by the company are understated.   Continued...

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. REUTERS/Chip East