*from www.bloomberg.com, Mar. 7, 2013 (To view original article click here.)
Take Away #1: Michael Dell’s $24.4 billion deal for Dell Inc. (DELL), has gotten complicated as Dell’s board seeks higher bids attracts interest from other buyers.
Key Facts and Figures:
- Dell’s board, seeking bids higher than offer from CEO Dell and Silver lake Management LLC, has attracted interest from Blackstone Group LP (BX), Hewlett-Packard Co. (HPQ), and Lenovo Group Ltd. (992)
- As Dell’s two biggest outside shareholders already oppose the deal, this new interest further increases pressure on Michael Dell to raise his offer.
- Dell’s shares have now risen well beyond the deal price to a nine-month high.
- After unveiling the $13.65-a-share offer last month, CEO Dell and Silver Lake have until March 22 to evaluate other proposals.
Take Away #2: Dell’s board states it “negotiated aggressively” to secure the best price and would extend the period for soliciting higher bids if a superior proposal emerged.
Key Facts and Figures:
- CEO Dell founded the company in 1984 and original brought the go-private proposal to the board in August.
- The deal — which requires approval from a majority of shareholders, excluding Michael Dell — has been opposed by holders including Southeastern Asset Management Inc. and T. Rowe Price Group Inc.
- Evercore Partners Inc. (EVC) is serving as financial advisor to the Board.
Take Away #3: Carl Icahn is pushing the company for a $9 a share special dividend.
Key Facts and Figures:
- Billionaire activist investor, Carl Icahn has amassed a stake in Dell and is pushing for a special dividend to shareholders.
- Icahn asked Dell’s board to pledge that it will implement his dividend proposal if shareholders reject the Michael Dell led offer.
- Otherwise, Icahn said he will start a proxy fight and seek to replace board members with his own candidates.
Take Away #4: Dell’s board is conducting a ‘go-shop’ process to determine if there are third parties interested in proposing alternative transactions that could be superior to the go-private transaction, for Dell’s public shareholders.
Key Facts and Figures:
- Dell’s board says it welcomes Carl Icahn and all other interested parties to participate in the process.
- Dell considered a leveraged recapitalization among other options before settling on the LBO.
- HP and Lenovo are taking advantage of the so-called go-shop period to get access to information only found in data made available to prospective buyers.
- Dell fell less than 1% to $14.30 at 9:44 a.m. in New York.
- Through yesterday, the stock advanced 41% this year, compared with an 8.1% gain in the S&P 500 Index.
Take Away #5: The Leveraged Buyout deal faces opposition from Dell’s two biggest outside shareholders, Southeastern and T. Rowe Price.
Key Facts and Figures:
- Southeastern, Dell’s largest outside shareholder, with an 8.4% stake this week requested the names and addresses of other shareholders to discuss the deal.
- Southeastern has vowed to use all options it has to block the buyout, including a potential proxy fight or litigation.
- Southeastern estimated last month that Dell is worth about $24 a share.
- T. Rowe, the second-biggest outside investor in Dell, has also voiced opposition.
- Chairman of T. Rowe Price has said, “We believe the proposed buyout does not reflect the value of Dell and we do not intend to support the offer as put forward.”
- Michael Dell and Silver Lake may need to raise the price to about $15 a share to win investor support.
*To view original article from www.bloomberg.com click here.