The Special Committee of the Board of Dell rejected a new proposal from key shareholder Carl C. Icahn, saying that it would continue to support the proposal by founder Michael Dell and private-equity firm Silver Lake Partners to take the company private.
Investor Carl Icahn on Tuesday proposed a $16 billion share buyback in his latest effort to thwart Dell founder Michael Dell's effort to take the struggling computer maker private. Icahn wants the company to buy back up to 1.1 billion Dell shares at $14 apiece to boost shareholders' return on their investment. The price of the buyback would represent about two-thirds of Dell's current market value of about $23.5 billion.
"Mr. Icahn's concept is not, in its present state, a transaction that the Special Committee could endorse and execute ? there is neither financing, nor any commitment from any party to participate, nor any remedy for the company and its shareholders if the transaction is not consummated. In addition, the concept does not adequately address the liquidity issues and other risks the Committee previously highlighted," Dell's Comittee said.
The Committee added that it still expects financial and other information from Mr. Icahn and Southeastern in connection with their previous recapitalization idea.
Michael Dell and Silver Lake Partners made an offer for Dell in February that aims to take the computers and services company private in a US$24.4 billion deal. The proposal offers to pay $13.65 per share in cash.