Michael Dell might not be as close to taking his company private as originally thought.
Dell's Special Committee of the Board, a team tasked with considering other proposals for the future of its business, confirmed today that it has received two buyout offers. One of those offers comes from investment firm Blackstone and the other from Carl Icahn.
"The Special Committee, consisting of four independent and disinterested directors, has determined, after consultation with its independent financial and legal advisors, that both proposals could reasonably be expected to result in superior proposals, as defined under the terms of the existing merger agreement," Dell wrote today in a statement. "Therefore, each of the Blackstone and Icahn groups is an "excluded party" and the Special Committee intends to continue negotiations with both."
Last month,, to take the company private. The transaction, which would also include investment firm Silver Lake Partners and a $2 billion loan from Microsoft, would have bought out the company's outstanding stock for $24.4 billion, or $13.65 per share.
According to Dell, the Blackstone proposal gives shareholders two options: cash out or stay in. Those that cash out will receive $14.25 per share. Those who decide to stay in will receive shares "valued in excess of $14.25." The Blackstone proposal would keep Dell public, meaning the company's stock would remain on the Nasdaq. Several other investment firms, including Francisco Partners, Insight Venture Management, and others, are participating in the Blackstone deal.
Carl Icahn, who has been quite outspoken about his displeasure with the Dell idea, and who already owns a piece of the PC maker, offered up a far more sophisticated deal that includes Dell receiving a $2 billion investment from Icahn and his company, Icahn Enterprises. Dell would also be forced to take on $5.2 billion in new debt.
Dell shareholders would once again have two options in the Icahn proposal. Those folks could either remain shareholders of the surviving company, or cash out at $15 per share.
Icahn envisions his company owning 24.1 percent of Dell at the end of the agreement. A host of investment firms would retain 25.9 percent of the company. The remaining 50 percent of the shares would be reserved for public shareholders.
Lingering out there, though, is Michael Dell. His proposal, which was put up against the others outlined in today's statement, is still on the table. But now, he and his cohorts will need to prove to Dell's special committee, and ultimately, its board of directors, that their move is best. Dell might also be forced, given the share-price offers outlined in the Blackstone and Icahn proposals, to increase his own.
But Icahn and Blackstone might have a fight ahead of them. In today's statement, the special committee, which is independent of all the proposals, according to Dell, said that although it will continue to negotiate with Icahn and Blackstone, their offers have so far not done enough to make them recommend another course of action.>
"There can be no assurance that either proposal will ultimately lead to a superior proposal," the Committee said. "While negotiations continue, the Special Committee has not changed its recommendation with respect to, and continues to support, the company's pending sale to entities controlled by Michael Dell and Silver Lake Partners."
Get ready for a war.