TIN BOX FLOGGER Dell has rubbished its financial performance to make Carl Icahn's takeover plans seem unrealistic.
Dell is the midst of a takeover battle as CEO Michael Dell tries to take the firm private, with investor Icahn and Southeastern Asset Management making a higher offer. The firm's Special Advisory Committee that is overseeing the "go shop" period has repeatedly failed to endorse Icahn's bid, and now the firm has taken to calling Icahn's figures based on "unrealistic multiples" and saying the company was outperformed by HP.
HP's recent financials have hardly been anything to shout about, with the firm reporting a 32 percent fall in profits. But it appears that Dell is embracing its rival's poor fiscal performance as a means to argue that Icahn is overvaluing the company.
In documents filed with the Securities and Exchange Commission, Dell asked, "How can Dell be worth 12 times EBITDA [earnings before interest, taxes, depreciation and amortisation] when its closest peer, HP, trades at 4.6 times EBITDA?"
The firm then went on to detail how its fiscal performance has been worse than HP's by noting that it had a larger quarter on quarter decline in operating income and earnings per share.
Dell is playing a dangerous game by going to such lengths to discredit the figures behind Icahn's proposal, and in this case it is undermining its own leadership.
Dell shareholders are expected to vote on takeover proposals later this month, with Icahn reportedly looking at candidates to replace Michael Dell should his proposal be accepted. µ