Carl Icahn appears set to enter the fray over the leveraged buyout of Dell.
Trading sources said they were confident that Icahn had amassed a position in Dell that may approach 100 million shares, and would bring him to a roughly 6 percent ownership. Icahn is expected to file a 13D on Dell very soon and purchased his shares over the last two weeks as Dell's stock has traded near $14.
When reached for comment, Icahn said he wouldn't discuss Dell or any rationale he had for the investment. However, people familiar with the situation said Icahn has met with advisors for Dell's special committee and urged them to pursue a leveraged recap of the computer maker—rather than the $13.65 a share leveraged buyout by Michael Dell and Silverlake that has been agreed to.
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Advisors to the special committee asked Icahn to sign a confidentiality agreement and join the go-shop process now being conducted by the special committee, but has yet to do so.
What is more likely is that Icahn will come out against the deal and argue in favor of Dell levering up its balance sheet to pay shareholders a significant one time dividend. That is the plan being espoused by Dell shareholder Southeastern Asset Management, which holds 8.4 percent of the company and is actively trying to organize shareholders to vote the deal down.
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That vote will require a majority of the shares not owned by Michael Dell to vote in favor and with Icahn potentially adding more heft to those opposing the deal, approval of the deal without a significant bump in price from the buyout party becomes less likely. Icahn has worked with Southeastern in the past on Chesapeake Energy, but there is no signs the two have been paired as yet on Dell.
Dell's special committee had considered a leveraged recap among other things as it negotiated with Michael Dell and Silver Lake, but felt it was highly risky to take on such debt for a broad shareholder base given the potential downside in Dell's business.
-By CNBC's David Faber; Follow him on Twitter @DavidFaber