THE DELL committee overseeing rival bids for the embattled PC maker has demanded that activist investor Carl Icahn explain his recent attempt to throw a spanner in the works.
The committee yesterday wrote to Icahn and his partner Southeastern Asset Management with a list of eight questions over the proposal that they pitched last week as an alternative to chief executive Michael Dell’s $24.4bn (£16bn) takeover offer.
Icahn and Southeastern propose to offer investors a payout that would leave them with a diluted shareholding, or the option to increase their share of the company. They claim this is a superior proposal to the buyout Michael Dell proposes, since it allows those who want to remain Dell investors to do so.
However, the committee said it was not clear if this constitutes an alternative buyout bid, or an option to be considered if Michael Dell’s offer was voted down. It also raised worries over how the proposal would leave Dell with enough cash to operate.
“In addition to working capital, [Dell] is likely to have other significant cash needs, such as approximately $1.7bn of debt maturities...12 months after closing,” the letter said.