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Last Update: 25-Mar-13 08:21 ET
Dell shares rise by 3% following proposals from Blackstone (BX) and Carl Icahn
Dell (DELL $14.62 +0.49) announced that the "go-shop" period provided for in the merger agreement between the company and entities owned by Michael Dell, Dell's Founder, Chairman and Chief Executive Officer, and investment funds affiliated with Silver Lake Partners, has elicited two alternative acquisition proposals. One proposal was submitted by a group affiliated with a private equity fund managed by Blackstone and the other by entities affiliated with Carl Icahn. Both proposals are attached. The price of $13.65 per share in cash to be paid pursuant to the existing merger agreement provides value certainty at a 37% premium to the average price for the 90 days before rumors of the transaction surfaced. The Committee noted that the Silver Lake Partners raised its bid six times by a total of approximately $4 billion, or over 20%, during the course of negotiations.
Blackstone (BX) Proposal: Letter stated "On behalf of Boulder Acquisition, Blackstone Management Associates VI, Partners III, LP, Insight Venture Management, LLC and each of their respective affiliates, affiliated funds and limited partners, we hereby submit this Acquisition Proposal and request prompt designation of the Investor Group as an Excluded Party, as such terms are defined in the Agreement and Plan of Merger by and among Dell a Delaware corporation and the Parent Parties dated as of February 5, 2013. Our Acquisition Proposal contemplates a leveraged recapitalization transaction with the following features: Shareholders who wish to receive cash will have the opportunity to receive greater than $14.25 in cash per share for all of their shares. Shareholders who wish to participate in the ongoing upside of the company will have the opportunity to remain as shareholders and receive shares (subject to a cap) valued in excess of $14.25, which shares would continue to be publicly traded on the Nasdaq."
Carl Icahn (IEP) Proposal: Letter stated: "We believe that you will agree that Icahn Enterprises is well able to provide the $1 billion cash equity capital (in addition to its existing $1 billion stock position in Dell), and that Mr. Icahn and his affiliates other than Icahn Enterprises are well able to provide the additional $3 billion cash equity capital, contemplated in this Acquisition Proposal, which constitutes an aggregate $5 billion equity commitment....In connection with the Proposed Merger, Dell shareholders will be entitled to elect to receive either: hares of the Surviving Company on a one-to-one basis with their current holdings; or an aggregate of up to $15.65 billion in cash payable at a rate of $15 per share.
Blackstone (BX) Proposal: Letter stated "On behalf of Boulder Acquisition, Blackstone Management Associates VI, Partners III, LP, Insight Venture Management, LLC and each of their respective affiliates, affiliated funds and limited partners, we hereby submit this Acquisition Proposal and request prompt designation of the Investor Group as an Excluded Party, as such terms are defined in the Agreement and Plan of Merger by and among Dell a Delaware corporation and the Parent Parties dated as of February 5, 2013. Our Acquisition Proposal contemplates a leveraged recapitalization transaction with the following features: Shareholders who wish to receive cash will have the opportunity to receive greater than $14.25 in cash per share for all of their shares. Shareholders who wish to participate in the ongoing upside of the company will have the opportunity to remain as shareholders and receive shares (subject to a cap) valued in excess of $14.25, which shares would continue to be publicly traded on the Nasdaq."
Carl Icahn (IEP) Proposal: Letter stated: "We believe that you will agree that Icahn Enterprises is well able to provide the $1 billion cash equity capital (in addition to its existing $1 billion stock position in Dell), and that Mr. Icahn and his affiliates other than Icahn Enterprises are well able to provide the additional $3 billion cash equity capital, contemplated in this Acquisition Proposal, which constitutes an aggregate $5 billion equity commitment....In connection with the Proposed Merger, Dell shareholders will be entitled to elect to receive either: hares of the Surviving Company on a one-to-one basis with their current holdings; or an aggregate of up to $15.65 billion in cash payable at a rate of $15 per share.
