A Dell Inc special committee challenged Carl Icahn on Wednesday, saying the activist investor is almost $4 billion short of the cash needed to fund his proposal for a $12-per-share special dividend.
The 39-page presentation issued on Wednesday by the board committee was the most detailed rebuttal yet to Icahn, who was not immediately available to comment.
Michael Dell and private equity firm Silver Lake have proposed a $24.4 billion buyout of the personal computer maker. Icahn and Southeastern Asset Management have made a counter offer that would pay the special dividend and allow Dell shareholders to keep their shares.
Icahn has said that if Dell rebuffed his dividend plan and put Michael Dell's offer to a vote, he and Southeastern would seek to nominate an alternate slate of 12 directors to challenge the current board and take control of the company.
The Dell board committee report pointed to a "significant liquidity gap" that could reduce the promised $12 dividend to as little as $8.50.
By the committee's reckoning, Icahn's cash allocation did not factor in Dell's debt service, expected cash flow shortfalls and various termination and other fees related to the Michael Dell/Silver Lake deal.
Taking all of those items into account, the presentation said Icahn would be $3.9 billion short.
The presentation also raised questions about Icahn's plan to let shareholders keep their Dell stock as part of the recapitalization.
Dell would need to trade at significantly higher multiples of enterprise value to operating earnings in order to make Icahn's math work, the committee said - a scenario it suggested was unlikely given the company's weakening performance.
Instead, the committee recommended stockholders vote for the $13.65-per-share cash offer from Silver Lake and Michael Dell.
Dell shares rose 1 cent to $13.43 in early trade.