Dell filed new proxy materials with the SEC reiterating that the Dell-Silver Lake $24.4 billion buyout was the best option. It dismissed the activists' proposal for a leveraged recapitalization and set July 18 as the date for shareholders to vote on the sale.
In a letter to shareholders, Dell, having contacted 21 strategic and 52 financial buyers during the go-shop period, says it reviewed all alternatives to the $13.65-a-share Dell-Silver Lake deal proposed and nothing seemed a better option. "Our analysis led us to conclude unanimously that a sale to the Michael Dell/Silver Lake group for $13.65 per share is the best alternative available — in a challenging business environment it offers certainty and a very material premium over pre-announcement trading price," the company writes. Dell further pressed the idea that the buyout would eliminate any possibility that the company's fortune erode further and harm existing investor, instead transferring those risks to the buyout group.
Dell says it "considered the merits and feasibility of a leveraged recapitalization," which is the type of deal that billionaire Carl Icahn and his partner Southeastern Asset Management suggest. Icahn and Southeastern earlier this month proposed a $12 a share or cash leveraged recap that would cost more than $21 billion. It would leave the company public, allowing shareholders who, like Icahn and Southeastern, believe the turnaround can be more easily accomplished than Michael Dell suggests.
Southeastern this afternoon renewed its opposition to the Dell-Silver Lake deal, encouraging shareholders to vote against the proposal and promising to release its own proxy materials. Southeastern and Icahn have vowed to do their best to stop it--certainly keeping court action as a possibility. Both are experienced activists, with previous campaigns against companies like
Reach Abram Brown at abrown@forbes.com.
