Conversely, a leveraged recapitalization of the sort advocated by Mr. Icahn would force Dell stockholders to maintain meaningful equity exposure to a non-investment grade, publicly traded company that we believe would likely be ill-prepared to weather further downturns in the PC business and could be hamstrung in its ability to make the additional investments needed to complete its transformational plan. We believe such a company would face instability that would undermine customer confidence and make it harder to attract and retain the best employees.
We have also evaluated alternative recapitalization transactions that involve a stronger balance sheet and more modest returns of capital. These would not pose the same risk to Dell’s future, but, in our view, they also would not fundamentally create value. Accordingly, we concluded, and we continue to believe, that a sale at a premium remains a superior option to a leveraged recapitalization.
In closing, we wish to note that it is unfortunate Mr. Icahn continues to conduct his campaign by trying to discredit the Special Committee and accuse it of frightening Dell stockholders. Such accusations do a disservice to all of you. The Committee has studied a complicated situation with great care, balanced risks and rewards in a dispassionate manner and concluded the transaction you are being asked to vote for on July 18th is in the best interests of stockholders. It would be irresponsible if we did not share with all stockholders the reasons for our conclusions.
In addition, we have taken extraordinary measures to ensure Mr. Dell’s neutrality and to leave the final decision with the disinterested stockholders. And for many months now, any party, including Mr. Icahn and Southeastern, has had and continues to have the opportunity to purchase the Company at a price higher than $13.65 a share. No such party has emerged.
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