Carl Icahn and Southeastern Asset Management, Dell’s biggest outside shareholder, are launching their campaign to derail a buyout of the PC maker.
The pair is proposing that the company pursue a leveraged recapitalization that will pay shareholders a $12-per-share dividend.
Their rival proposal, which is outlined in a letter to the company’s board, threatens to complicate a bid by founder and CEO Michael Dell to take the company private.
In February, Michael Dell, who owns a 15.6 percent stake, and private-equity firm Silver Lake Partners signed a definitive agreement to buy the company for $13.65 a share, or $24 billion.
Under Icahn’s proposal, shareholders could take a dividend equal to 88 percent of Dell’s offer and still keep their shares. They could opt to have the dividend paid in cash or additional stock.
Icahn and Southeastern are proposing that the company fund the dividend by repatriating the $9 billion in cash it has sitting offshore, as well as borrowing money against Dell’s account receivables. Its net account receivables totaled $9.8 billion. In addition, Dell would be borrowing $5.2 billion.
The duo also is announcing it will put up a slate of 12 directors ahead of Dell’s annual meeting if Dell does not deem its proposal to be superior to Michael Dell’s buyout plan. The annual shareholder meeting and vote on the buyout plan or recapitalization is expected to be held in June or July.
The Post first reported this week that Icahn and Southeastern were preparing to launch a proxy contest in a push to get directors onto the board.
Icahn and Southeastern argue that Dell is selling too cheaply and should focus on returning money to shareholders.