Chad Batka for The New York TimesCarl Icahn has suggested a so-called leveraged recapitalization of Dell.
The billionaire investor Carl C. Icahn said on Monday that he had signed a confidentiality agreement with Dell Inc., potentially heading off a confrontation over the computer company’s $24.4 billion sale.
In a brief statement, Mr. Icahn’s firm said that it “looks forward to commencing its review of Dell’s confidential information.”
The signing of the confidentiality agreement may keep Mr. Icahn from speaking out against Dell’s planned sale to its founder, Michael S. Dell, and the investment firm Silver Lake. Mr. Icahn had threatened to publicly challenge the deal in a letter to the computer maker’s board, indicating that he would call for the company to borrow money and pay out a special dividend.
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Document: Icahn news release
Over days of negotiations last week, advisers to a special committee of Dell’s board successfully coaxed Mr. Icahn into signing a confidentiality agreement, this person said. The directors had wanted Mr. Icahn to provide a proposal during the so-called go-shop process aimed at drawing higher bids than Mr. Dell’s $13.65-a-share offer.
One option is a preliminary proposal Mr. Icahn had floated early on in talks with the Dell committee, in which he would run a tender offer for some of the company’s shares at a price of $15 each.
He later focused on his demand for a special dividend, a move that the special committee said it had already considered and discarded as inferior to Mr. Dell’s offer.
Shares of Dell rose 1 percent, to $14.31, in premarket trading on Monday.
It is unclear how big a stake Mr. Icahn has amassed; he has described it only as “substantial.” The confidentiality agreement does not include a standstill agreement that would prevent him from adding to his stake, according to a person briefed on the matter.
“The special committee welcomes Carl Icahn and all other interested parties to participate in the ‘go-shop’ process,” the Dell committee said in a statement. “Our goal is to determine if there are alternative transactions that could be superior to the going-private transaction and to secure the best result for Dell’s public shareholders – whether that is the announced transaction or an alternative.”
Article source: http://dealbook.nytimes.com/2013/03/11/icahn-signs-confidentiality-agreement-with-dell/?partner=rss&emc=rss