| NEW YORK
NEW YORK May 23 Activist investor Carl Icahn
and Southeastern Asset Management Inc have initiated talks with
banks and asset managers to begin syndicating a $5.2 billion
term loan B to back their bid for Dell Inc, banking sources told
Thomson Reuters LPC on Thursday.
Jefferies & Co is leading the deal.
Pricing on the loan is being guided at 350bp over Libor,
though pricing could change as syndication efforts are only in
the early stages, the same sources said.
Jefferies declined to comment. Calls to Carl Icahn,
Southeastern and Dell were not returned by press time.
The arranger is asking for commitments as large as $1
billion and is expected to have lenders lined up as early as
In a May 9 letter to Dell's board, Icahn and Southeastern
Asset Management, two of the company's largest shareholders,
proposed an alternative to a buyout deal led by founder Michael
Dell and private equity firm Silver Lake Partners. Under the
Icahn proposal, shareholders could hold onto existing stock with
the option of receiving either a distribution of $12 per share
in cash or $12 a share in stock valued at $1.65 per share.
The proposal would be financed by existing cash and about
$5.2 billion in new debt.
This new bid by Icahn and Southeastern rival an offer made
earlier by Michael Dell and Silver Lake Partners who are looking
to take the company private for $13.65 a share, or $24.4
Dell has already received $13.75 billion in debt commitments
from a number of banks and Microsoft Corporation to back that
offer. Bank of America Merrill Lynch, Barclays, Credit Suisse
and RBC Capital Markets agreed to provide $11.75 billion in bank
lines and Microsoft agreed to purchase up to $2 billion in
Icahn and Southeastern, which together own about 13 percent
of Dell stock, have argued that the Silver Lake offer
undervalues the company.
Dell's shares rose 0.17 percent to $13.39 Thursday morning.