More broadly, based on analyses prepared by our advisors and our own view of the business, we do not believe that Mr. Icahn’s proposal is superior to the certainty of value offered by a sale of the entire Company at $13.65 per share. The addition of warrants to Mr. Icahn’s concept has not meaningfully altered the value equation: The warrants themselves would, according to the analyses we have reviewed, be of modest value and that value would be offset in part by their dilutive effect on the stub equity held by the recipient. Further, on receipt, the entire value of the warrants would likely be taxable to the holder. Finally, there is a fundamental illogic in ascribing meaningful value to the transfer of a portion of any upside above $20 per share from those who most believe in it (apparently Mr. Icahn and Southeastern) to those who do not believe in it (the tendering stockholders who have sought to cash out at $14 per share).While for the foregoing reasons Mr. Icahn’s proposal does not provide the basis for the Committee to change its recommendation, we are mindful of the fact that the Board could independently resolve to consummate various leveraged recapitalization transactions – including one along the lines outlined by Mr. Icahn – with or without an agreement by certain shareholders like Mr. Icahn and Southeastern to roll over their shares. Throughout its thorough, multi-month review process, the Special Committee has carefully considered the possibility of various recapitalization transactions. We have reviewed sources of financing for such a transaction, the credit parameters of the Company following a substantial dividend or stock repurchase, and the liquidity and market implications of various potential approaches.
Dell Special Committee Issues Letter To Stockholders
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