The new proposal by Carl C. Icahn and Southeastern Asset Management for Dell presents some new complications that a special committee of the computer company’s board must consider.
But in some ways, it simplifies matters a bit.
In the eyes of the special committee, the offer put forth by Mr. Icahn may actually be a step backward from his last proposal. During Dell’s go-shop process, meant to solicit higher-priced alternatives to a $24.4 billion buyout by Michael S. Dell and the investment firm Silver Lake, the billionaire offered to pay $15 a share for 58 percent of the company.
Now, Mr. Icahn and Southeastern are demanding that Dell pay out $12 a share to investors, either in cash or in additional stock. The two shareholders, who together own more than 11 percent of the company, would take stock, and are seeking to have the support of 20 percent of the company’s shares.
It is closer to what Mr. Icahn had proposed when he first surfaced as a big shareholder in Dell: a special dividend of $9 a share.
According to the special committee’s calculations, that would mean a group led by Mr. Icahn and Southeastern would ultimately control about two-thirds of Dell.
The offer essentially amounts to a big. one-time special dividend. The committee said in a statement that it was reviewing the proposal.
But it isn’t clear whether those directors will ultimately view the new demand by Mr. Icahn as a superior proposal, since he technically doesn’t have to put any money up and isn’t seeking to buy control outright. In securities filings, the committee said that it had considered alternatives to a sale of the company, including a so-called leveraged recapitalization similar to what the Icahn-Southeastern group has proposed â€" but deemed them inferior to Mr. Dell’s offer.
Mr. Icahn hasn’t formally laid out how his plan would be financed, though he said on CNBC that he would be willing to offer “a couple of billion dollars†as bridge financing and had an informal commitment of $1.6 billion from the Jefferies Group.
Should the special committee turn down Mr. Icahn and Southeastern, the two investors will seek to persuade fellow shareholders to vote down Mr. Dell’s offer. And then they will seek to replace the company’s entire board at an annual investor meeting to follow soon afterward. (While Mr. Icahn has called upon Dell to combine the two votes in a single meeting, the board is unlikely to agree, and it’s unclear how he can force such a move.)
Meeting dates haven’t been set yet for either a vote on the deal or for the annual meeting. But the former is likely to be scheduled sometime in July, and if necessary the latter would be held sometime in August, according to a person briefed on the matter.
