Business

Dell opens books to activist investor Icahn's scrutiny

 

Dell has agreed to open up its books to the scrutiny of Carl Icahn.

The activist investor, who owns a substantial stake in the US computer maker, opposes plans by founder Michael Dell to buy out his eponymous firm.

Mr Icahn has signed a confidentiality agreement with the firm to gain access.

He has joined other shareholders in opposing the proposed $24.4bn (£16.3bn) buyout, demanding instead that Dell pay a special $9 dividend, equivalent to about two-thirds of its market value.

Mr Icahn has offered to provide more than $5bn in loans towards the cost of financing the dividend.

The investor, known for his interventions in the management of other publicly traded companies, has also threatened to put up his own candidates to replace the current directors on the company's board, in order to implement his plan and block Mr Dell's buyout offer.

Mr Icahn may have allies in pushing for a better deal. Dell's largest independent shareholder, Southeastern Asset Management, has said that Mr Dell's offer "grossly undervalues the company", while reports suggest other large investors also oppose the deal.

Mr Dell, along with technology private equity firm Silver Lake, offered in mid-February to buy out the firm at price of $13.65 per share, financed in part by loans from Microsoft - which produces the operating systems for Dell's computers - and from various banks.

However, Dell's share price rose a further 1.25% on Monday to $14.34 - well above the buyout offer price, indicating that investors believe a better offer may ultimately materialise.

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