After examining Carl Icahn's revised offer backed by secured financing, a Dell committee reportedly has advised Michael Dell to raise his $24.4 billion offer to take the computer maker private.
The special committee of Dell's board managing the computer maker's effort to go private told Dell's founder and chief executive a few days ago that he should submit a higher offer if he wants his proposal to succeed, a source familiar with the matter told Reuters. The committee reportedly reached that conclusion after meeting with investors as well as a pending recommendation by investment advisory firm Institutional Shareholder Services.
The influential firm is said to be leaning toward recommending against the deal, decreasing the likelihood investors will embrace Michael Dell's $13.65-a-share bid, sources tell Bloomberg .
CNET has contacted Dell and Silver Lake Partners, Michael Dell's investment partners on the proposal, for comment and will update this report when we learn more.
Despite earlier skepticism about Icahn's proposals, the mood change comes on the heels of the revelation that the activist investor had secured $5.2 billion in loans from several banks and institutional investors to finance his Dell buyout proposal.
Icahn, who opposes the company's plan to go private, proposed in a letter to shareholders last month that Dell buy back 1.1 billion shares at $14 per share as an alternative to the plan to take the company private proposed by company founder Michael Dell and Silver Lake Partners. Icahn also announced that he had purchased 72 million Dell shares from proxy fight partner Southeastern Asset Management, making him the second largest shareholder in Dell.
At the time, the committee criticized Icahn's proposal as lacking adequate financing, a stumbling block the investor appears to have remedied.