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Rival Dell Buyout Plans Duke It Out
jfruh writes "Michael Dell's plan to take the company he founded private, with help from Microsoft, isn't going smoothly. Corporate raider and major Dell stockholder Carl Icahn has presented a rival plan that would shut Michael Dell out. Perhaps predictably, the Dell board isn't sold on Icahn's idea, saying it will leave the company short of cash, even though they haven't been able to fully evaluate it yet."
He has no interest in the company - he just wants a quick payday. Problem for him is nobody is really that interested in Dell, so his machinations aren't going to work this time. It's comical that he thinks the company is worth north of $20/share.
I dont think he has any real interest in buying the company. I think he is trying to leverage a higher payout on his shares in the end. Cant blame him for wanting to maximize his cash but he is really acting like a dick
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It can safely be assumed that any proposal put forward by Carl Icahn is purely self-serving to the detriment of anyone who gets in his way. If his bid wins, you can write off Dell as a company - he will raid everything of value and the company will be left in shambles within two years, tops. Michael Dell, however, will do everything possible to salvage the company and turn it around and make it into the company it deserves to be. I'm sure shareholders will only care about what's in it for them but I can virtually guarantee that, while Icahn is going to make his proposal sound fantastic for their short-term bottom line, he doesn't care about anyone else's bottom line - he cares only about his own.
Also Icahn will leave thousands of people unemployed as Dell collapses and is torn apart. Michael Dell will at least keep people employed.
Yeah, can you guess which bid I hope wins out?...
Didn't Dell's board strike a deal with Ichan just a month ago and he wasn't going to go the "make a bunch of noise" route? More importantly he was going to stop causing trouble?
Icahn to Dell: "Dude, you're not getting a dell"
I assume that the plan involves promising the investors serious enough to matter a cut of the spoils, and then just rolling over the rest of them...
It's not like it's news that these sorts of buyouts are the M&A equivalent of a chestburster in a pinstripe suit; but there isn't exactly a shortage of available capital that doesn't much care how the returns are generated, just so long as they are good...
Seriously, after watching Mitt Romney load companies up with debt which he used to "buy" it, and then letting the company implode under the load of its debt, what serious investor could agree to such a proposal?
The ones who think they can sell their shares for $20/share to suckers, right alongside with Icahn.
The kind of investor that likes these kinds of buyouts are the ones who are in it for the short term. They bought/will buy Dell when it is low and then wait for a temporary boost in the stock price after the deal goes through then sell quickly. The long term investors/employees who have Dell stock in a retirement fund like an IRA will get screwed.
Well, there's spam egg sausage and spam, that's not got much spam in it.
I thought the example of Nokia should be enough now. That's sad, I really enjoy my Vostro laptops.
I guess after the deal is done Dell will be offering Windows RT and Windows 8 tablets and go south.
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"Icahn has Dell?"
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That's the game. You are "freeing" the rank and file employees to play on a level field with all the other companies... Right after the investors and managers get THEIR CASH OUT. Essentially, these deals borrow money against existing paid-off capital to payoff investors to reduce the number to qualify as a private company again. So you are trying to pay people extra money to cash out and leave now.
Even the bankers are in on it, because the employees are saddled with higher interest rates on everything, even things the old boss paid cash for. That's where the cry for "work ethics" kicks in for workers to "do what it takes" to keep their jobs. And how Unions become the big bad guys.. Because they are working for cash at WORK TIME for the new managers when the old owners cleared out the cash long before. This is what killed Twinkies.
I guess you're trying to refer to Enron where employees had Enron stock in their retirement account and couldn't sell it. As a current Dell employee, I can tell you that we don't have Dell in our 401(k) (at least not directly -- it may be in mutual funds. The fund manager can sell any Dell stock and we can move our money to other funds). There is an Employee Stock Purchase Plan... but once the stock is purchased, we own it and can sell it at anytime. Anybody who owns Dell stock in a self-directed IRA can sell it any time.
So basically, you're a retard and have no idea what you're talking about.
Icahns offer works out at $12 a share, lower than Dells offer.
http://www.engadget.com/2013/05/10/dell-icahn-southeastern-counteroffer/
"Carl Icahn and Southeastern Asset Management have both opposed the $24.4 billion / $13.65 per share buyout proposal from the start and have an alternative proposal: a $12 per share dividend, funded by Dell's $9 billion in cash and $5.2 billion in new debt."
So his pitch is:
Shareholders give him the company and its cash.
Icahn hands back the cash part, borrows some against the company part and hands that back.
He gets company for free.
Profit (but for Icahn not for you)
I'm not an expert in corporate finance, but this doesn't add up. Under that plan, Icahn gets Dell, but Dell no long has any cash because Icahn spent it all paying out the dividend to shareholders and Dell is $5 Billion in debt (the amount borrowed to pay the rest of the dividend to shareholders). I see no "profit" for Icahn in this unless he chops up Dell and sells it off (which is what often happens n these type of deals).
1) He is part of the shareholders (12% to 20% ownership - large chunk of cash right there)
2) You just answered your own question. He's already selling off Accounts Receivables.
Yep, when you see Icahn circling it just mean the carcass still has some meat on it.
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Actually, Dell does have Dell stock in its 401(k) and it doesn't have an employee stock purchase plan...
Right, "broken companies" like Staples, Sports Authority, Domino's, Experian, etc etc. Oh wait, all of those are doing a heck of a lot better than they were before.
Bain took risky buys, companies that were failing, and turned a healthy number of them into successes. Not all their buys worked out but you don't blame the doctor by complaining that his patients have all been sick.
You know, Obama won the election; you can quit with the falsehoods and slander already as it doesn't serve any purpose any more.
Icahn's reputation compared to others in the field of buying control of companies is pretty good, if what you value is keeping good parts intact and shedding waste.
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