Reports: Icahn, Southeastern make alternative bid for Dell

Earlier, Blackstone Group had withdrawn its bid for the company

Investor Carl Icahn and Southeastern Asset Management have made a counter-offer for Dell that would keep the computer company still publicly traded, according to reports.

The two key shareholders in the company have in a letter to its Board offered to give Dell's shareholders the option to keep holding stock in the company, and take an additional US$12 a share in cash or stock, The Wall Street Journal reported.

Founder Michael Dell and private-equity firm Silver Lake Partners made an offer for Dell in February that aims to take the company private in a US$24.4 billion deal. The proposal offers to pay $13.65 per share in cash.

But Icahn proposed as an alternative in March a "leveraged recapitalization" of Dell, which would announce to shareholders a special dividend of $9 per share in the event of the Dell-Silver Lake proposal being voted out by shareholders. The dividend would be financed from existing cash, receivables and new debt.

Dell could not be immediately reached for comment on the new offer.

Icahn and Southeastern, who together hold significant stock in Dell, are also said to have raised the possibility of changing Dell's board and management, according to the newspaper.

Another bidder, Blackstone Group gave up its bid for Dell in April citing "an unprecedented 14 percent market decline in PC volume in the first quarter of 2013" and the company's eroding financial profile. "Since our bid submission, we learned that the company revised its operating income projections for the current year to $3.0 billion from $3.7 billion," it said. The offer had aimed to keep Dell publicly-traded, and offered investors the option to stay invested or sell their shares at more than $14.25 in cash per share.

IDC reported in April PC shipments of 76.3 million units in the first quarter, down 13.9 percent compared to the same period last year.

Blackstone and entities associated with Icahn presented proposals in the so-called "go-shop" period for alternative bidders to make their offers.

If the special committee of Dell's board continues to prefer Michael Dell's offer, Icahn and Southeastern have threatened to file lawsuits, according to The New York Times.

Tags business issuesservicesDellMIchael Dellhardware systemssoftwareSoutheastern ManagementCarl Icahnrestructuring

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John Ribeiro

IDG News Service

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