Dell Special Committee Receives Two Alternative Acquisition Proposals in “Go-Shop” Process

Dell Special Committee Receives Two Alternative Acquisition Proposals in “Go-Shop” Process

Date : 3/25/2013
Round Rock, Texas
The Special Committee of the Board of Dell Inc. (NASDAQ: DELL) today announced that the “go-shop” period provided for in the merger agreement between the company and entities owned by Michael Dell, Dell’s Founder, Chairman and Chief Executive Officer, and investment funds affiliated with Silver Lake Partners, has elicited two alternative acquisition proposals. One proposal was submitted by a group affiliated with a private equity fund managed by Blackstone and the other by entities affiliated with Carl Icahn. Both proposals are attached. 
“We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders. We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders, whichever transaction that may be.”

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. Therefore, each of the Blackstone and Icahn groups is an “excluded party” and the Special Committee intends to continue negotiations with both. 

The Special Committee also noted that Michael Dell has confirmed to the Committee his willingness to explore in good faith the possibility of working with third parties regarding alternative acquisition proposals. 

Alex Mandl, Chairman of the Special Committee, said, “We are gratified by the success of our go-shop process that has yielded two alternative proposals with the potential to create additional value for Dell shareholders. We intend to work diligently with all three potential acquirers to ensure the best possible outcome for Dell shareholders, whichever transaction that may be.” 

Pursuant to the existing merger agreement, subject to certain requirements, the Special Committee has the right to terminate the agreement in order to accept a superior proposal. The Special Committee has not determined that either the Blackstone proposal or the Icahn proposal in fact constitutes a superior proposal under the existing merger agreement and neither is at this stage sufficiently detailed or definitive for such a determination to be appropriate. There can be no assurance that either proposal will ultimately lead to a superior proposal. 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. 

Prior to entering into the existing merger agreement, the Special Committee undertook a rigorous process, over a period of more than five months, to evaluate Dell’s risks, opportunities, and strategic alternatives. These alternatives included continuing with or modifying the company’s existing business plan, implementing a leveraged recapitalization, changing the dividend policy, and potentially selling all or parts of the business. 

As a result of that process, the Special Committee unanimously determined that the sale of the company at a premium would be the best alternative for stockholders, and negotiated aggressively to ensure that stockholders receive the highest possible value, including securing provisions for a robust “go-shop” process. The result was that a number of strategic and financial parties entered into confidentiality agreements with the company and Blackstone and Icahn submitted proposals. 

The price of $13.65 per share in cash to be paid pursuant to the existing merger agreement provides value certainty at a 37% premium to the average price for the 90 days before rumors of the transaction surfaced. The Committee noted that the Silver Lake Partners raised its bid six times by a total of approximately $4 billion, or over 20%, during the course of negotiations. 

Subject to applicable laws and regulations, the Special Committee undertakes no obligation, to provide updates or make further statements regarding the proposals received from Blackstone or Icahn, any revised proposals that may be received from either of them or the status of discussions with either of them, unless and until a definitive agreement is reached or such discussions are terminated. 

The alternative acquisition proposals received from Blackstone and Icahn follow here: 

Blackstone Proposal

Icahn Proposal