Carl Icahn secures finance for rival Dell bid as founder lashes out

Billionaire investor Carl Icahn has secured $US5.2 billion in loans from Jefferies & Co in order to finance his rival bid for computer giant Dell.

According to Reuters, the debt is divided between a $2.2 billion six-year term loan and a $3 billion three-year term loan.

“We expect to have $5.2 billion in the next couple of weeks. Our investment bank is already committing $1.6 billion and my affiliates and I would provide $2 billion, if necessary,” Icahn said.

However, Dell founder Michael Dell has lashed out at Icahn’s rival takeover bid, claiming in a presentation filed with the US Securities and Exchange Commission that keeping the company public while it restructures would damage its future prospects.

Dell also said he will fight Icahn’s takeover bid even if his own consortium’s private equity takeover bid, which includes Silver Lake Capital, is unsuccessful.

“[I] will also oppose the kind of imprudent leveraged recapitalisation that has been suggested by certain other parties,” Michael Dell said.

As SmartCompany reported last month, under Icahn’s leveraged recapitalisation plan, shareholders in Dell would receive a once-off payment of $US12 per share in either cash or stock (values at $US1.65 per share), with the company borrowing to fund the $US21 billion payment.

Since then, Icahn and Southeastern Asset Management, which own 13% of the tech giant, have presented a stock buyback offer for 1.1 billion shares at $14 a piece in a stock buyback.

If accepted, Icahn will also appoint a new board of directors to oversee the company, which will not include founder Michael Dell.

The counter-offer comes after Dell and Silver Lake offered shareholders $US24.4 billion, or $US13.65 per share, to take the company private in a deal involving Microsoft.

 

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