Icahn’s proxy fight looms large on Dell horizon - DELL, HPQ, BX, LNVGY, IBM & EVR
Northern, WI 03/08/2013 (avauncer) - It took Michael Dell over six-moths of careful planning to put his $24.4 billion deal for Dell Inc (NASDAQ:DELL) on the table and its just hit more bad weather. Carl Icahn the billionaire has accumulated a Dell stake and is now urging the company to pay a special dividend of $9 per share. Dell’s board has been scouting for bids that are higher than what the company’s founder had put forth and finally some new buyers are emerging. Rival computer-makers Lenovo Group Limited (PINK:LNVGY) and Hewlett-Packard Company (NYSE:HPQ) as well as The Blackstone Group L.P (NYSE:BX) have shown some interest said some people who are familiar with the matter. The talks are private and the people do not wish to be identified.
Opening up the competition
There has already been a lot of opposition to Michael Dell’s offer, this added interest will now definitely increase the pressure on him and he will have to consider financial partners other than Silver Lake Management LLC and up his offer as well. Though it is highly unlikely that Dell’s rivals will bid for the company, it has definitely helped in creating the shake-up that it was intended to and Dell Inc (NASDAQ:DELL)’s share prices have risen to a nine-month high and have gone way beyond the deal price. Michael Dell and Silver Lake had put forth a $13.65 per share offer last month and they are free to evaluate other proposals until March 22.
Aggressive negotiation unsuccessful
The computer-maker has been defending itself and facing growing dissent from its investors for accepting a bid that undervalued the company. Michael Dell who founded the company in 1984 was seeking a leveraged buyout as the company had been pushed into the shadows of the mobile market and had been struggling with keeping pace with rivals in the computing services and products space such as International Business Machines Corp (NYSE:IBM). The deal will need majority approval which excludes Michael Dell and the board has maintained that it had negotiated the offer very aggressively in a bid to get the best price. Dell’s financial partner is Evercore Partners Inc (NYSE:EVR).
Proxy fight a possibility
After Hewlett-Packard Company (NYSE:HPQ) and Lenovo Group Limited (PINK:LNVGY), Dell Inc (NASDAQ:DELL) is the largest computer-maker and its bigger competitors are taking advantage of the “go-shop “ period to acquire access to company information that is available only to prospective investors. Icahn has asked Dell’s board members to commit that his dividend proposal will be implemented by them if Michael Dell’s offer is rejected. He also said that if the Dell board fails to do so, a proxy fight will be started by him and his own candidates will sit on the Dell board. A person familiar with the matter said that Icahn had deliberated buying a portion of Dell’s stock at $15 per share before putting forth the special-dividend request.
Dell’s largest outside shareholder Southeastern holds an 8.4% stake in the company has just this week requested a comprehensive list of investor names and addresses from Dell Inc (NASDAQ:DELL) as they wish to discuss the offer with them. T. Rowe Price, another big investor is supporting the move.
Shares of Dell Inc (NASDAQ:DELL) went down by 0.70% to close at$14.22
Shares of Hewlett-Packard Company (NYSE:HPQ) went down by 0.38% o close at $20.85
Shares of The Blackstone Group L.P (NYSE:BX) went up by 0.63% to close at $19.05
Shares of Lenovo Group Limited (PINK:LNVGY) went up by 0.86% to close at $22.26
Shares of International Business Machines Corp (NYSE:IBM) went up by 0.50% to close at $209.42
Shares of Evercore Partners Inc (NYSE:EVR) went up by 0.12% to close at $43.16