Southeastern Sells Over Half Of Its Dell Shares To Icahn To Fight Dell

In a letter to investors disclosed Monday, Southeastern Asset Management disclosed that it had sold over half of its shares of Dell DELL to Carl Icahn IEP in an attempt to bolster Icahn's war chest and prevent the takeover offer from CEO Michael Dell and Silver Lake Partners from going through.

Bolstering the War Chest

In its quarterly letter to shareholders of its Longleaf Partners funds, Southeastern said that it had sold over half of its Dell shares to Icahn in the first half of the year to help him fight off the takeover offer from Dell and Silver Lake. "Given his structure, flexibility, and capital, Icahn was in the best position to lead the development of an outcome that provided an attractive payout but allowed shareholders to remain owners and benefit from the company's transformation," wrote the asset management firm.

"We sold approximately half of our Dell shares to Icahn to enable him to construct a compelling alternative. Subsequent to quarter-end, the Dell Board has extended the vote on the buyout offer three times as it became obvious that shareholders would not approve the deal."

Related: . Dell shares were flat on the day on very light trading as the stock traded in a mere 3 cent range. Shares traded flat at $13.74 per share.

Competing Deals

Michael Dell and Silver Lake recently raised their offer for the stock from $13.50 per share to $13.75 per share and also offered a special dividend of $0.13 per share on top of the $0.08 regular quarterly dividend that the company pays. Michael Dell, as of May 22, reported a stake of 15.56 percent in Dell.

Icahn proposed a counter-offer of $14.00 per share plus a warrant for investors which has a total value of about $18 per share, depending on where Dell shares end up after his deal. He proposed to buy about 70 percent of the stock and keep the rest floating publicly; he reported a stake of 8.91 percent as of August 1, which appears to have included the shares bought from Southeastern.

Southeastern reported a stake of just under 70 million shares as of July 12.