Icahn Has Funding To Keep Dell Public; Channel Hopes Dell Stays On Private Course

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Dell, unlike IBM in the past, is being highly watched in a competitive environment, making it hard for the company to make the necessary changes while its top competitors and investors watch every move, Mavenspire's Tanenhaus said.

"As a partner, do I think Dell can do all the things it needs when the competitors read all the reports?" he said. "I don't know. I'm sensitive to the idea that shareholders may not get a better deal if Dell goes private. But as a partner, I'm personally for privatization of Dell. They've been clear on their strategy. I prefer the knowing vs. the not knowing."

Icahn, who last month compared Dell's method of shopping for superior offers for the company's shareholders to selling a home by advertising it as having termites, wrote that his allies now have $5.2 billion in committed debt financing, $7.5 billion from cash on the Dell balance sheet, and $2.9 billion that can come from the sale of receivables.

That, Icahn wrote, is a total of the $15.6 billion needed for a tender offer of 1.1 billion Dell shares at $14 per share, which would still leave Dell with $4.9 billion in cash remaining.

However, he said, he and Southeastern Asset Management have agreed not to take advantage of the $14 tender offer, which means that stockholders should be able to get $14 per share for at least about 72 percent of their Dell stock.

"[They would get] an even higher percentage if other stockholders believe, like us, that Dell's best days are ahead of it and decide to hold onto their Dell shares," he wrote.

The Dell Special Committee, in a Monday statement, responded to Icahn's latest moves, stating that "The Special Committee has reviewed Mr. Icahn's open letter and will be pleased to review any additional information, including financing commitments, that it may receive from him regarding his recapitalization proposal. The Committee remains committed to achieving the best outcome for all Dell shareholders."


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