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Icahn, Southeastern, Shift Dell Takeover Goal Posts (Update 1)

Icahn and Southeastern Asset Management believe their proposal is a compelling alternative to a full takeover for Dell because it will dividend out Dell's cash and give investors continued upside in a possible turnaround of the PC-maker and burgeoning IT services specialist.

Icahn has called Silver Lake and Michael Dell's proposal for the world's third leading computer maker the "great giveaway."

To finance Friday's proposed $12-per-share payout, Icahn and Southeastern will use Dell's existing cash and $5.2 billion in new debt, which they point out pales in comparison to the $16 billion in debt Silver Lake's consortium has already arranged for a go-private. Icahn will obtain a bridge loan to guarantee his proposed financing.

"Evercore Partners, the investment banker Dell purportedly hired to euphemistically 'go shop' the company, has told Mr. Icahn on more than one occasion that the 'independent committee' has only one concern, and that is to do what is right for shareholders," Icahn wrote in a letter to Dell's board of directors. "Our proposal gives the Board a final chance to prove that what they say is correct. "

Dell shares were rising less than 1% in early Friday trading to $13.44 a share.

Shares currently sit below Silver Lake's proposed $13.65 a share offer and are well below prices that reached as high as $14.50 a share amid a takeover frenzy that's cooled.

-- Written by Antoine Gara

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