US- Icahn adds perk to Dell offer

(MENAFN- The Peninsula) Billionaire investor Carl Icahn is offering shareholders a chance to own a bigger stake in Dell Inc, seeking to force Michael Dell to sweeten his $24.4bn buyout offer for the personal-computer maker. Icahn, who holds 8.7 percent of Dell, is adding a warrant to his $14-a-share offer that holders could exchange for additional stock, he said in a letter on Friday. The value to shareholders would be about $15.50 to $18 a share, he said. Icahn's latest move is his fourth effort to scuttle the $13.65-a-share buyout by Chief Executive Officer Dell and Silver Lake Management ahead of a shareholder vote on July 18. While Icahn has said that Dell can still compete in the PC market as a public company, the proposal remains risky because the benefit depends on shares surging about 50 percent higher than their current price, according said Jeff Fidacaro, an analyst at Monness Crespi Hardt & Co. "This deal is not a home run," said Fidacaro. "Carl's got a fight in front of him." Dell and Silver Lake's offer represents a premium of 25 percent over the Round Rock, Texas-based computer maker's closing share price of $10.88 on January 11, the last trading day before news of a deal surfaced. Michael Dell is seeking to take the company he founded in 1984 private to turn it into a contender in tablets and cloud computing. His proposal won key endorsements this week from Institutional Shareholder Services Inc. and two other influential proxy advisory firms, and it also has the backing of the special committee of Dell's board that's evaluating potential transactions on the company's behalf. "ISS has done a great disservice to stockholders by making a recommendation focused on the criticism" that shareholders can't immediately reap the benefits of Icahn's offer, he said in the letter. "We continue to view our proposal, particularly with the addition of the warrant, as economically better for stockholders." The warrants act like equity options and are common in takeovers as a way of enhancing value. Icahn is offering one transferable warrant for every four shares bought in the self- tender offer, according to the letter. The warrant would permit the investors to buy Dell shares for $20 for up to seven years, the document shows. Dell last traded above $20 in 2008. Icahn said he was preparing to exercise appraisal rights that are available to shareholders of companies incorporated in Delaware and urged other shareholders to do the same. By seeking an appraisal, investors can seek a higher price for their shares in court.