A special committee of Dell‘s board offered on Friday to reimburse Carl C. Icahn up to $25 million worth of expenses tied to a possible bid for the computer company â€" provided that he plays nicely.
To get his out-of-pocket expenses reimbursed, Mr. Icahn must agree to refrain from running a proxy fight against Dell’s board or filing a lawsuit against the company, according to a letter sent to him by the committee. Both the Blackstone Group and Silver Lake, Dell’s other suitors, agreed to those restrictions in order to win similar reimbursements.
But the company wants to ensure that it does not end up financing any legal challenges by the irascible activist investor, who last month hinted that he might try to get his own director nominees elected if Dell moved forward with the $24.4 billion proposed sale to Silver Lake and Michael S. Dell.
“Our goal is to create a truly level playing field in which the best transaction would prevail,†the Dell special committee wrote in a letter to Mr. Icahn. “Absent a commitment on your part to play on such a field, we must respectfully decline your request for expense reimbursement.â€
Mr. Icahn, along with Blackstone, was one of only two parties to make a bid for control of Dell during a 45-day “go-shop†period that ended last month, seeking to sway the company from the Silver Lake proposal.
Both are currently conducting due diligence on the computer maker to firm up any final offers. Blackstone is expected to send a team to Dell’s offices in Round Rock, Tex. on Monday to further inspect Dell’s finances and operations, according to people briefed on the matter.
The billionaire investor requested to have his expenses reimbursed earlier this week, according to a person briefed on the matter, after Dell disclosed in its proxy statement last week that Blackstone had requested an agreement to be reimbursed for up to $25 million. Silver Lake was also granted that same payout. The agreement with Blackstone was considered unusual and had raised some eyebrows.
