Icahn, Southeastern propose alternative to Dell buyout

(Reuters) - Activist investor Carl Icahn and Southeastern Asset Management Inc, two of Dell Inc's biggest shareholders, have proposed an alternative to a buyout deal led by founder Michael Dell.

In a letter to Dell's board on Thursday night, Icahn and Southeastern proposed that current owners keep their equity position with the option to either receive $12 per share in cash or $12 in additional shares valued at $1.65 per share.

Under the plan, shareholders could hold on to existing stock and have the option of receiving a distribution of $12 a share in cash or $12 a share in stock valued at $1.65 a share.

They said they would finance the proposal from existing cash and about $5.2 billion in new debt.

Both Icahn and Southeastern would take additional shares rather than cash, they said in the letter.

Dell shares rose 0.7 percent to $13.41 in premarket trade on Friday.

Icahn and Southeastern said if Dell's board pursues the go-private offer with a shareholder vote, they will put up a slate of 12 directors to challenge the current board.

Icahn and Southeastern, both outspoken opponents of the go-private deal, said in the letter they together hold about 13 percent of Dell stock.

Michael Dell and private equity firm Silver Lake want to take the company private for $13.65 a share, amounting to a $24.4 billion deal. That would make it the largest private equity-led buyout since the 2008 financial crisis.

A Silver Lake representative declined to comment. Dell was not immediately available for comment.

Icahn and Southeastern have argued that the buyout effort by Michael Dell and Silver Lake significantly undervalues the company.

"We want this board to hear from both Icahn and Southeastern loud and clear that it is insulting to shareholders' intelligence for the board to tell them that this board only has the best interests of shareholders at heart, and then accept Michael Dell's offer to purchase the company he founded," the letter said.

In April, Blackstone LP ended its pursuit of Dell, pulled out a month after it teamed up with Icahn to challenge the take-private attempt.

(Reporting by Sakthi Prasad and Supantha Mukherjee in Bangalore; Editing by Edwina Gibbs, Saumyadeb Chakrabarty and Jeffrey Benkoe)

Source: http://news.yahoo.com/icahn-southeastern-propose-alternative-dell-buyout-deal-wsj-044842529.html

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