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THE WALL STREET JOURNAL.
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BUSINESS | May 7, 2013, 1:55 p.m. ET
Icahn, Southeastern Weigh
Teaming Up on Dell Nominations |
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Southeastern Asset Management
Inc. and investor
Carl Icahn are talking about teaming up to nominate directors to the
Dell Inc. board as part of an effort to derail the computer maker's
$24.4 billion leveraged buyout, people familiar with the matter said.
The two Dell shareholders have
been publicly against the buyout inked by private-equity firm Silver Lake
Partners and company founder
Michael Dell, saying it undervalues the company. Mr. Icahn made a
preliminary counterbid for Dell but has since abandoned that avenue in favor
of a more-hostile approach, a person familiar with his thinking said.
He and Southeastern see
nominating directors as a potential way to signal to shareholders that Dell
has other options should they vote down the buyout, people familiar with
those discussions said. Also, if shareholders do vote down the deal, having
members on the board could give Southeastern and Mr. Icahn more leverage to
direct the company's next move.
There is a May 13 deadline to nominate directors to the Dell board.
The New York Post reported earlier that Mr. Icahn was
preparing to team with Southeastern on such a strategy.
It
is possible the effort could be fruitless even if Southeastern and Mr. Icahn
move forward with the plan.
The
shareholder vote on the Dell buyout will almost certainly take place before
investors get to vote on nominees for the board. If the Silver Lake deal
gets approved, a vote for a new slate of board candidates would likely be
moot. The company hasn't announced a date for either the vote on the deal or
the annual meeting.
The
Silver Lake deal would pay Dell shareholders $13.65 per share. Currently
shares are trading around $13.28.
Southeastern and Mr. Icahn have
teamed up before. In 2012, they worked together to push
Chesapeake Energy Corp. to replace half its board with new directors.
On
Dell, Southeastern and Mr. Icahn have separately argued that the company is
being sold too cheaply and that Dell should borrow money and return capital
to shareholders rather than fund a buyout.
Southeastern, Dell's largest outside shareholder with 8.4%, went public with
its opposition to the buyout days after the company announced the deal in
early February. Mr. Icahn later said he amassed a 4.6% stake in the company.
The
two have considerable sway with their combined stake. But so does Mr. Dell,
who holds 14% of Dell shares.
Mr.
Icahn last month reached a deal with the Dell special committee that allows
him to consult with other holders as long as he doesn't form a group that
would give him control of more than 15% of Dell shares—which would top Mr.
Dell's holdings—or amass more than a 10% stake on his own.
Write to Sharon
Terlep at
sharon.terlep@wsj.com
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