Carl Icahn to sweeten Dell buyout offer

The new bid will up the pressure on Michael Dell.

New Statesman
Michael Dell, CEO of Dell. Credit: Getty Images.

Billionaire investor Carl Icahn, in his latest effort to takeover Dell, has said that he will add a warrant to his $14bn takeover bid of the PC maker.

“We think the warrant will be around $20, to buy the stock at $20, and we’re going to give the shareholders a piece of that warrant,” Icahn told Bloomberg TV.

Icahn, who holds an 8.7 per cent stake in Dell, added: “That will make it definitely superior. We think, after talking to a number of shareholders, that this should win the day for us. But you can’t be sure, obviously.”

With the added warrant, shareholders could exchange for additional stock if Dell stock increases to around $20.

Earlier, Icahn and Southeastern Asset Management, collectively offered a $14 per share for the company’s 1.1 billion shares compared to Michael Dell and Silver Lake’s combined offer of $13.65 per share.

Erik Gordon, a business professor at the University of Michigan, told Bloomberg: “He is going to have to come up with something big to break the momentum in favor of Michael’s deal. Another 50 cents won’t do it and another rant won’t do it.”

Meanwhile, three shareholders Highfields Capital Management, Pzena Investment Management and Yacktman Asset Management, who together hold nearly 3 per cent of Dell, are planning to vote against Michael Dell’s buyout offer of $24.4bn, reported Reuters.

A crucial Dell shareholders meeting will be held on 18 July 2013.