Carl C. Icahn and his
affiliates today issued the following open letter to
stockholders of Dell Inc. DELL
Dear Fellow Dell Stockholders:
We are in the process of perfecting our right to seek appraisal
of our Dell shares and we believe that you should also perfect
your appraisal rights. Under Delaware law if a merger occurs
and you did not vote for it, you are entitled, through
appraisal, to the fair value of your shares as determined by a
Delaware court. We have done a great deal of due diligence
concerning the value of Dell, and as we have said in the past,
we believe the $13.65 merger price substantially undervalues
your Dell shares, and we believe if you seek appraisal, you will
receive more. BUT WHAT IS MOST IMPORTANT ABOUT SEEKING
APPRAISAL IS THAT YOU CAN CHANGE YOUR MIND ABOUT APPRAISAL UP TO
60 DAYS AFTER THE MERGER AND STILL TAKE THE $13.65 PER SHARE.
During the “free 60 day period” we believe Dell may wish to
negotiate with those that sought appraisal and possibly pay a
premium over $13.65 to get them to settle and drop their
appraisal claims, as explained below. To add a new twist to an
old saying, “you can have your cake and eat it too”.
Those Who Seek Appraisal May Get Lucky
In many merger transactions, if over a certain number of
stockholders seek appraisal rights, this gives the purchaser the
right to opt out of the transaction and thereby avoid the
uncertainty created by appraisal. However, Michael Dell and
Silver Lake did not obtain this opt out right. This leaves
Michael Dell and Silver Lake VERY exposed. Because they
neglected to obtain this right, no matter how many stockholders
seek appraisal, if the merger is approved, Michael Dell and
Silver Lake are obligated to close or pay a $750 million
penalty. We would certainly like to be present to hear the
discussion between Michael Dell/Silver Lake and their lenders as
they consider the impact of a substantial exercise by
stockholders of their appraisal rights. Will the lenders use
this as an excuse to refuse to close claiming this is a material
adverse change, especially in light of the terrible time Dell is
having in the PC market as so often stated by Dell themselves?
We think that there is a good chance that none of them will want
to face the overhang of a large number of stockholders seeking
appraisal. I therefore believe there will be significant
pressure on Michael Dell and Silver Lake to resolve the
appraisal rights, and possibly seek a settlement during the
“free 60 day period”. Even if you want the Michael Dell/Silver
Lake offer to be accepted, unless you believe your shares will
tip the balance, why vote for it? Why not seek appraisal and
have the benefit of the “free 60 day period”? Dell may well pay
a premium over $13.65 to settle with those seeking appraisal.
THE PROCESS TO SEEK APPRAISAL RIGHTS TAKES TIME, SO ACT NOW IF
YOU WISH TO PERFECT YOUR APPRAISAL RIGHTS AND IMMEDIATELY
CONTACT YOUR BROKER AND OTHER ADVISORS. If you have any
questions concerning appraisal rights or wish to seek help or
information regarding appraisal rights, contact D.F. King & Co.,
Inc. at 1-800-347-4750 or dell@dfking.com. They will take your
information and provide it to people at Icahn who will call you
back.
REMEMBER YOU CAN CHANGE YOUR MIND ABOUT APPRAISAL DURING THE
“FREE 60 DAY PERIOD” AND STILL TAKE YOUR $13.65 PER SHARE.
For a detailed discussion of the process for perfecting and
exercising appraisal rights, see page 180 of the Definitive
Proxy Statement on Schedule 14A filed by Dell with the SEC on
May 31, 2013.
We continue to urge stockholders to vote AGAINST the Michael
Dell/Silver Lake transaction.
Sincerely,
Carl C. Icahn Keith Schaitkin
Chairman General Counsel
Icahn Enterprises, L.P. Icahn Enterprises, L.P.
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