Carl Icahn's bid to disrupt plans to buyout Dell have ramped up, with the billionaire offering to pay $14 a share for a majority stake in the company if shareholders help him in reducing the proposed $24.4bn (£15.6bn) offer for the ailing PC maker.
Shareholders' reaction to Icahn's previous two proposals have been mixed and his third and latest proposal comes after Michael Dell and private equity firm Silver Lake bid $13.65 a share to take the company private.
In an open letter, Icahn said that the deal "significantly undervalues the company".
"We propose that Dell commences a tender offer for approximately 1.1bn Dell shares at $12 per share (for a maximum of $16bn [£10.2bn] available in the tender offer)," he said.
Independent shareholder Southeasten said it would sell about $1bn of its Dell shares or half of its stakes to Icahn for $13.52 a share, making him Dell's largest external investor. Icahn and Southeastern hold about 13 per cent of Dell's shares, but it said that if Dell was to go to tender in the way it has proposed, it will agree not to tender in the tender offer.
"Our proposal allows those who believe, like us, that the $13.65 price being offered in the Michael Dell/Silver Lake going private transaction significantly undervalues Dell, to continue to hold Dell shares. It also provides an opportunity for those who wish to tender at $14 a share to do so," Icahn said.
The billionaire went on to say that Dell could fund a tender offer with $5.2bn of debt financing, along with $7.5bn in cash available at Dell (after taxes and payment of fees) and $2.9bn available through a sale of Dell receivables. He added that this would leave about $4.9bn of cash available for ongoing Dell operations.
Dell's special board committee said it would review Icahn's latest proposal but said that in its current form it was not actionable.
"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," it said.
It added that Icahn and Southeastern had still not responded to requests for more information in regards to their previous proposals.
