In a 37-slide presentation, filed today with the SEC, Dell's board further presses the idea that the bid by billionaire Carl Icahn and Southeastern Asset Management is inferior to the one made by founder Michael Dell and private equity shop Silver Lake Partners. Dell directors favor the $24.4 billion proposal from Michael Dell and Silver Lake, and they are waging a campaign to make sure shareholders approve it next month.
Unlike Michael Dell and Silver Lake, Icahn and Southeastern would allow interested investors to remain in the company, while offering $12 in shares or cash to those wishing to exit. It would finance the deal in $5.2 billion in new debt and the existing cash on Dell's balance sheet.
However, Dell's directors believe Icahn and Southeastern fail to consider next April's $1.4 billion debt department and the $450 million termination fee would need to pay to scuttle the Michael Dell-Silver Lake proposal. What's more, the board says Icahn and Southeastern underestimate the cash that Dell needs to run its business. To make it work, Dell directors believe Southeastern and Icahn would need to raise another $3.9 billion. Or they could cut their offer to $8.50 a share from $12 a share.
Reach Abram Brown at abrown@forbes.com.
