ICAHN: I'm Going To Have A Higher Dell Offer Tomorrow
This week Institutional Shareholder Services, a shareholder advisory board, recommended that Dell shareholders spurn Icahn's deal in favor of the deal put together by Dell founder Michael Dell and private equity firm Silver Lake.
Here's the new deal Icahn told Bloomberg he's willing to put on the table:
“We are going to be coming up with a higher bid tomorrow morning. A little bump on my part. That is what I am looking for. You are giving US $14. You have a 73-percent taking. I think this is superior to the $14.65. We will add to that bid. We will warrant to that. The bid will be superior, even to what is superior. We are giving $14. They are 75-percent. Then they will own the stub for 25-percent of the stock. We think it is worth more than $14. We will do a warrant which is will be valuable. This is vastly superior to the Dell deal… We are going to come and add to the package which we think is superior already. We think that it will be around $20, buy the stock at 20 and we will give the shareholders a piece that warrant. We think that will make it utterly superior and we will go to the independent board. We will show them this and tell them that we think it is superior. This is our recommendation and we hope that it has traction. You cannot be sure, obviously, so, we will see what happens. So you heard it here first.”
Dell is offering $13.65 per share, but in a statement filed early this week Icahn is urging shareholders to take that offer to a Delaware Court and have it appraised.
He's hoping if shareholders make that move, he'll be able to negotiate a better price in the process.
We are in the process of perfecting our right to seek appraisal of our Dell shares and we believe that you should also perfect your appraisal rights. Under Delaware law if a merger occurs and you did not vote for it, you are entitled, through appraisal, to the fair value of your shares as determined by a Delaware court. We have done a great deal of due diligence concerning the value of Dell, and as we have said in the past, we believe the $13.65 merger price substantially undervalues your Dell shares, and we believe if you seek appraisal, you will receive more. BUT WHAT IS MOST IMPORTANT ABOUT SEEKING APPRAISAL IS THAT YOU CAN CHANGE YOUR MIND ABOUT APPRAISAL UP TO 60 DAYS AFTER THE MERGER AND STILL TAKE THE $13.65 PER SHARE. During the “free 60 day period” we believe Dell may wish to negotiate with those that sought appraisal and possibly pay a premium over $13.65 to get them to settle and drop their appraisal claims, as explained below. To add a new twist to an old saying, “you can have your cake and eat it too”.
It's good that Carl always has a sense of humor.