FORTUNE -- Dell Inc.'s special committee this morning told Carl Icahn that it needs more information about his offer to buy the company, including where he intends to get the debt financing.
Icahn last week reiterated his position that Michael Dell and Silver Lake Partners are basically stealing Dell (DELL) via their $13.65 per share take-private offer, and that he could do better with a $12 per share offer that also includes a public equity stub. His bid is in partnership with fellow dissident shareholder Southeastern Asset Management, who hold a combined 11.5% ownership stake.
But Icahn did not say where he would get the money, namely a $5.2 billion bridge loan that would be required to complete the transaction. In subsequent interviews Icahn said that Jefferies (LUK) had committed $1.6 billion from its own balance sheet and that Icahn himself would be willing to chip in upwards of $2 billion (if necessary). But no word yet on the remainder, and Dell's special committee is telling the activist investor that he needs to either put up or shut up. From its letter sent this morning:
"It is not clear to us whether you intend to formulate your transaction as an actual acquisition proposal that the Board could evaluate and potentially endorse or accept or rather to propose it as an alternative that the Board could consider in the event the pending sale to Silver Lake and Michael Dell is not approved. In order for the Special Committee of the Board of Directors of Dell to evaluate the transaction you have proposed and potentially negotiate terms which could cause it to constitute a Superior Proposal within the meaning of the pending Merger Agreement, we would need certain clarifications and additional materials."
In addition to financing sources, Dell's special committee also is asking Icahn for a formal purchase agreement (so far he only has submitted a letter of interest), the names of those he would place in senior management (he has said that Michael Dell wouldn't be CEO) and for commitment letters from other existing shareholders who would elect to take stub equity instead of $12 per share (Icahn needs a total of 20% to do so, under his formulation).
Dell's special committee also asks Icahn for post-closing liquidity plans, taking a not-so-subtle dig at his understanding of the company's financial needs:
"Please describe any contemplated arrangements to provide working capital or other liquidity following the closing. Your proposal does not appear to take into account the additional borrowings that would seem to be required to address the liquidity needs that would result from the extent to which you would use the Company's cash in the transaction and the fact that you would sell accounts receivable, which would have the effect of reducing future cash flows. In addition to working capital, the Company is likely to have other significant cash needs, such as approximately $1.7 billion of debt maturities within approximately 12 months after closing."
Should be interesting to see how Icahn responds to all of this, since it's basically Dell's special committee trying to call him on a bluff. There is an assumption by many that Icahn doesn't really have interest in buying the company, but rather is trying to squeeze a few extra dollars out of Silver Lake and Michael Dell -- an assertion Icahn disputed in a Friday interview with Fortune: "People are often very wrong when they try to perceive why we do what we do, but it serves my purposes. But, in this case, I can say that I'm trying to buy Dell, not yet another point or two on my shares."
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Blackstone ends its pursuit of the PC maker.
FORTUNE -- The Blackstone Group (BX) is ending its pursuit of Dell Inc. (DELL) without formally submitting a superior offer to the $24.4 billion bid made earlier this year by company founder Michael Dell and private equity firm Silver Lake Partners.
The Wall Street Journal first reported the news earlier this evening, and it has been independently confirmed with multiple sources by Fortune. We also MOREDan Primack - Apr 18, 2013 10:14 PM ET
The PC maker's silence has become deafening.
FORTUNE -- Ever since Dell Inc. announced in January that it had accepted a $24.4 billion buyout offer from founder and CEO Michael Dell, plenty of people have voiced their opinions. The company's two largest outside shareholders have come out in opposition, calling the $13.65 per share price "completely out of proportion to what's reasonable." Some uninvolved private equity executives have lauded minority investor MOREDan Primack - Mar 1, 2013 2:04 PM ET
Dell's largest outside shareholders are opposing its $24 billion buyout plan.
FORTUNE -- T. Rowe Price yesterday became the latest Dell Inc. shareholder to oppose the company's plans to go private, saying the proposed $13.65 per share deal "does not reflect the value of Dell." This has got to be making Michael Dell sweat a bit.
T. Rowe Price (TROW) holds around 86 million shares of Dell (DELL) stock, or around 5% MOREDan Primack - Feb 13, 2013 12:43 PM ET
Preemptively "investigating" the sale to Silver Lake.
FORTUNE -- Every time private equity agrees to acquire a publicly-traded company, a bevy of plaintiff's attorneys initiate "investigations." Never mind if the offer represents a 500% premium to where the company's stock has traded since 1981, it will be deemed possibly insufficient.
Given that most of the "investigations" are wild goose chases, why wait until a deal is actually announced? After all, there's that MOREDan Primack - Jan 24, 2013 1:15 PM ET
No talk of Dell, or anything else.
FORTUNE -- Silver Lake Partners co-founder Glenn Hutchins was scheduled to be on CNBC this morning, with a producer tweeting that he would be asked about his firm's reported efforts to help Dell Inc. (DELL) go private.
But then it didn't happen. First CNBC put up a graphic suggesting that the interview had been pushed back a half hour. But then anchor Carl Quintanilla announced that MOREDan Primack - Jan 24, 2013 11:11 AM ET
Private equity's role in big data's evolution.
By Hollie Moore Haynes, contributor
The list of life's certainties has gotten longer. Along with death and taxes we can now include information overload. The amount of data generated on a daily basis has exploded, overwhelming people and organizations alike. This creates an opportunity for many types of investors, including private equity firms, to turn information overload into smart data that can drive decision-making at MOREDec 26, 2012 7:15 AM ET
A startup hopes to disrupt the mobile services market.
FORTUNE -- Mobile services startup ItsOn today announced that it has raised $15.5 million in Series B funding, from backers like Andreessen Horowitz and SV Angel. So we took some time to discuss the company with co-founder Charlie Giancarlo, the former chief development officer for Cisco who currently is a managing director and head of value creation for private equity firm Silver MOREDan Primack - Oct 30, 2012 3:00 AM ET
Valuing private equity's technology specialist.
FORTUNE -- Yesterday we wrote about how The Carlyle Group has received annual "valuations" from the California Public Employees' Retirement System (CalPERS), ever since selling a 5.5% equity stake to the pension system in 2001. But Carlyle is not the only unlisted (for now) private equity firm to have sold a piece of itself to CalPERS.
Silver Lake Partners, the tech-focused firm known for deals like Skype MOREDan Primack - May 1, 2012 3:40 PM ET
Private equity firm Silver Lake Partners appears to be forming a tech-focused venture debt vehicle, as a compliment to its broader credit platform.
Silver Lake today filed with the SEC for a pooled investment vehicle called Silver Lake Waterman Fund, which can raise up to $75 million (with nearly $18 million already committed). One of the four listed executives is Rick Stubblefield, a longtime venture debt investor who has spent the past MOREDan Primack - Mar 15, 2012 5:05 PM ET
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