A COMMITTEE set up to oversee the bidding war for computer giant Dell has rejected the proposal put forward by activist investor Carl Icahn, claiming the bid puts shareholders at risk of earning substantially less than they would under a rival offer from billionaire founder Michael Dell.
The committee instead gave Michael Dell’s $24.4bn (£15.9bn) offer its full support ahead of a shareholder vote next month.
Icahn had teamed up with Southeastern Asset Management on an alternative offer that would recapitalise the company and pay out a special dividend. He claimed the bid was superior to Michael Dell’s $13.65 per share offer to take the firm private because it allowed investors that want to retain a stake in Dell to do so.
However, the committee warned that the recapitalisation plans had a “significant liquidity gap” and said it could see shareholders paid just $8.50 per share in a worst-case scenario. It also recommended that shareholders approve Michael Dell’s bid, saying that going private is the best way to turn the business around as it suffers from a monumental decline in PC sales.
Investors are set to vote on Michael Dell’s offer at a special meeting on 18 July.