Billionaire Carl Icahn is approaching investors for$5.2bn in loans to back an alternative bid to buy out ailing PC maker Dell.
Icahn,who will become Dell's largest external investor if Southeastern sell him about$1bn of its Dell shares,is against the proposal from the company's founder,Michael Dell,to buy out the company for$24.4bn and make the company private.
Icahn letter to Dell:buy back stock at$14 a share Dell's board recommends Dell's bid for Dell Icahn and Southeastern return with another Dell counter-offer
Most recently,in his bid to disrupt Michael Dell's buyout plans,Icahn offered to pay$14 a share for a majority stake in the company if shareholders help him in reducing the founder's proposed offer for the PC maker.He said that the deal Michael Dell and private equity firm Silver Lake were proposing at$13.65 a share"significantly undervalued the company".
In order to ease the passage of his proposal,Icahn is now attempting to secure$5.2bn in loans,so that Dell can go to tender for 1.1 billion shares,Bloomberg reports.
But Icahn's plan is"unrealistic",because of a$2.9bn shortfall,Dell said in a regulatory filing,meaning that the value of dividends would be reduced to$8.15 a share.
Jefferies Group LLC could invest in the deal,with a source with knowledge of the offering stating that the bank could arrange a$2.2bn six-year loan and a$3bn three-and-a-half-year contract.
