The latest in the Dell saga is that Carl Icahn has announced that he’s got the money to do his $10-to-$14-or-whatever-a-share tender offer, and by “money” of course I mean commitments from lenders that are contingent on the tender offer happening, which itself is contingent on a bunch of other things, including Dell shareholders voting down the Michael Dell / Silver Lake buyout, another deal not materializing, Carl Icahn winning a proxy fight and electing directors who think that the tender offer is a good idea, and those directors approving the tender offer.1 When I first saw this, I figured the committee meetings for Icahn’s banks must have been kind of fun? Like: you’re probably not going to get hit on this? But if you do, my lord, what have you gotten yourself into?
I submit to you that Michael Dell’s “presentation to investors” filed today will tell you everything you need to know about Dell, even if you don’t read it. Just look at it! Here, for instance, is the slide justifying the $13.65 price that Michael Dell and Silver Lake are paying to LBO the company:
Why is this a PowerPoint presentation? It’s all like this – 8 pages of dense bullet-point text, no graphics, no charts, no tables, no nothing. Just words. In complete sentences. Write a letter, man! You run a computer company. You have made a serious error in choosing the right software for your purposes.
The message of the presentation is the same mildly confusing message that Dell has been pushing for a while: Read more »
Carl Icahn seems to have a lot of fun. Today he wrote a crazy letter to Dell shareholders that opens this way:
We take this opportunity to respond to rumors regarding the availability of financing for our proposal for a recapitalization at Dell and to address recent statements by Dell that demean the prospects of Dell. We are amazed by these statements by the Dell Board. In what other context would the person tasked with selling a product actually spend their efforts negatively positioning the very product they are trying to sell? Is that how the supposed “go-shop” was conducted? Can you imagine a real estate broker running advertisements warning of termite danger in a house each time a prospective buyer seems interested?
We can talk about the “recent statements by Dell that demean the prospects of Dell” in the footnotes1; up here let’s talk about Icahn’s “respon[se] to rumors regarding the availability of financing for our proposal for a recapitalization at Dell.” He says later in the letter: Read more »
I feel like it would be a useful, or at least entertaining, exercise to require every company, once a year or so, to give a presentation to its shareholders that is like “here’s why you should vote for an LBO of our company at a ~2% premium to the current stock price.” Even if there’s not an LBO in the offing, I mean; just as rhetorical practice. Like Buffett’s tame bear. Anyway Dell, which does have an LBO in the offing, filed its presentation today and it’s 39 pages of “boy do we suck”:
Man, the resistance to this Dell deal is crumbling pretty fast isn’t it? Blackstone dropped its bid two weeks ago, Icahn and Southeastern have been relatively quiet since Icahn defended his right to a free exchange of ideas just before Blackstone dropped out, and the stock is at $13.33, ~2% below the $13.65 deal price, after being as high as $14.51 in the hopes of a better deal.
Dell filed its revised merger proxy today, with revisions presumably mostly driven by the SEC’s comments on its first draft from March. It doesn’t look like the SEC put up much resistance either; here’s a crappy redline and the changes are smallish. Here’s my favorite piece of SEC nitpicking:
Get it? That’s: Read more »
A good public-relations rule of thumb is that, when you and your nemesis sign an agreement putting aside your differences, you should probably also agree on how you’ll announce your new friendship to the world. What you don’t want to do is, for instance, to sign a standstill agreement with a potential buyer in your strategic process, and announce that standstill agreement one morning, and then a few hours later have the potential buyer put out his own announcement taking issue with your characterization. Another rule of thumb might be, keep Carl Icahn away from your strategic process if at all possible.
This morning Dell sort of blandly announced that Carl Icahn had agreed not to buy more than 10% of Dell’s shares, or enter into agreements with other shareholders that would get him above 15%. And this afternoon Icahn announced that that agreement meant nothing and nobody should give it a second thought: Read more »