Dell buyout twist

ACTIVIST investor Carl Icahn has built a stake of around 100 million shares in Dell Inc and wants the personal computer maker to conduct a leveraged recapitalisation, complicating founder Michael Dell's effort to take the company private, CNBC reported.

Icahn, who is known for shaking up management, has accumulated a stake in Dell representing six per cent of the company, CNBC cited sources familiar with the investment as saying yesterday.

That will make the billionaire investor the next largest shareholder after Southeastern Asset Management, based on previously available data.

The network reported that Icahn wanted Dell to take on debt of as much as US$9 billion (RM27.95 billion) and pay out a special dividend to shareholders, and will likely oppose the deal.

Shares of Dell closed almost 1.8 per cent higher at U$14.32.

Icahn did not respond to requests for comment.

Icahn's arrival on the scene typically puts companies - and their boards - on guard, because the outspoken activist investor has a reputation for aggressively demanding changes by building up stakes in target corporations.

Michael Dell has struck a deal to take private the No. 3 personal computer maker he created in a college dorm room in 1984 and is partnering with private equity house Silver Lake and Microsoft Corp.

But the US$24.4 billion deal is being opposed by some of Dell's major shareholders, including Southeastern Asset Management, which said the deal undervalued the company.

Southeastern has considered whether to team up with another firm to attempt a counter bid to Michael Dell's deal, The Wall Street Journal said, citing people familiar with the matter.

Southeastern has demanded on Tuesday that Dell open its books, signalling it could become more active in opposing the offer.

A special committee of Dell's board of directors said earlier on Wednesday the pending sale of the PC maker was the best alternative for shareholders, despite opposition from its largest outside shareholder.

The committee said it had also looked at alternatives such as leveraged recapitalisation, changing the dividend policy, selling parts of the business and working with the company's current business plan. Reuters