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Michael Dell believes he can turn around Dell by spending heavily to build better tablets, while also diversifying into more profitable areas of technology, such as business software and data storage. He contends those changes likely will be tumultuous and easier to tolerate if the company no longer has to answer to other shareholders. Dell Inc. would become privately held for the first time in 25 years if Michael Dell's bid prevails.
If Dell Inc. isn't sold, analysts believe the company's stock might retreat to where it stood in the months leading up to the deal with Michael Dell and Silver Lake. The shares sunk to $8.69 in November, its lowest level since the depths of the Great Recession in March 2009.
The shares might be temporarily bolstered while Icahn and Southeastern Asset pursue a complex proposal that would pay $14 per share for nearly two-thirds of Dell's outstanding stock. Warrants also would be issued to allow shareholders to buy more stock in the future. Icahn and Southeastern value their proposal at $15.50 to $18 per share.
In his letter to shareholders last week, Michael Dell said he won't back Icahn's plan. He also has indicated he intends to remain CEO of the company even if his buyout offer fails.
AP Business Writer Tom Murphy contributed to this story.