By Nathalie Tadena
Dell Inc. (DELL) said it is willing to provide activist investor
Carl Icahn with the same expense reimbursement that it has offered
to its other two bidders, but only if Mr. Icahn drops his threats
to pursue a proxy fight and litigation.
In a letter to Mr. Icahn on Friday, Dell's special committee of
directors noted that Mr. Icahn has threatened the company's
directors with "years of litigation" and a proxy fight if they do
not conduct the transaction process in the manner that he
prefers.
"We are willing to provide you with the same expense
reimbursement that has been made available to the other two bidders
if you will commit contractually to work within our process, but we
are not prepared to do so as long as you, unlike them, reserve the
right (and continue the threat) to subvert it with a proxy fight,
litigation and other tactics that would prolong the instability and
uncertainty facing the company," the company said in its
letter.
Mr. Icahn wasn't immediately available for comment.
Dell disclosed in its proxy statement last week that it agreed
to reimburse Blackstone Group LP (BX) as much as $25 million in
transaction-related expenses. A similar cap also applies to Michael
Dell and Silver Lake Partners.
Dell unveiled in mid-February plans for a controversial $24.4
billion takeover by its founder, Mr. Dell, and investment firm
Silver Lake, and the competing Blackstone bid emerged during the
subsequent "go-shop" period.
Silver Lake and Mr. Dell unveiled their offer Feb. 3, aided by a
$2 billion loan from Microsoft Corp. (MSFT) and $13.75 billion in
new bank debt, launching the start of the "go-shop" period. That
window resulted in inquiries from several firms, though only
Blackstone and Mr. Icahn, who had acquired nearly 5% of Dell's
stock and publicly criticized Silver Lake's offer, emerged with
proposals Dell's board has decided could become firm offers that
could top Silver Lake's standing bid.
The special committee said in its letter it encourages Mr.
Icahn's continuing participation in the sales process and hopes
that he submits a proposal that it can determine to be superior to
the currently pending merger.
"Our goal is to create a truly level playing field in which the
best transaction would prevail," Dell said in its letter. "Absent a
commitment on your part to play on such a field, we must
respectfully decline your request for expense reimbursement."
Dell shares closed at $14.22 and were unchanged after hours. The
stock is up 30% over the past three months.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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