Carl Icahn Will Likely Walk Away From The Dell Proxy War

Posted Jun 17, 2013

Billionaire investor Carl Icahn is likely going to walk away from the proxy battle that he started at PC manufacturing company, Dell Inc.  Carl Icahn is going to drop his bid for Dell due to funding issues, according to CNBC.  Apparently Icahn and Southeastern Asset Management is having a hard time putting together $5.2 billion that is needed for making an offer for Dell.

Icahn’s deal rivals a $24.4 billion leveraged buyout deal that Michael Dell and Silver Lake Partners put together.  Icahn allegedly told investors that part of the delay for his bid is the $3.9 billion funding gap that was called out on June 5th by the special committee of Dell’s board that is overseeing the process to go private.

Last month, Carl Icahn and Southeastern offered to recapitalize Dell and shareholders a $12 special dividend and leave a publicly held stub.

One of the reasons why Icahn had trouble borrowing money is because interest rates have increased.  Another reason is because potential lenders are seeing Dell struggle as a company and believes that it is a huge risk to underwrite a bid.