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Icahn’s Dell math gets an F

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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March 7, 2013, 8:45 PM ET
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FORTUNE — Carl Icahn on Tuesday sent a letter to the Dell Inc. (DELL) board of directors, laying out his alternative to the company’s agreement to be acquired for $24.4 billion by Michael Dell and private equity firm Silver Lake Partners. But Icahn’s math doesn’t exactly add up.

Here is the relevant section:

“Rather than engage in the Going Private Transaction, we propose that Dell announce that in the event that the Going Private Transaction is voted down by share holders, Dell will immediately declare and pay a special dividend of $9 per share comprised of proceeds from the following sources: (1) $4.26 per share, or $7.4 Billion, from available cash as proposed in the Going Private Transaction, (2) $1.73 per share, or $3 Billion, from factoring existing commercial and consumer receivables as proposed in the Going Private Transaction, and (3) $4.26, or $5.25 Billion in new debt.”

So Icahn wants a $9 per share dividend, to be paid through a combination of available cash, receivables and new debt. Except the specific figures he cited actually add up to $10.25 per share.

Where did the extra $1.25 go? Is he subtracting taxes that might have to be paid on repatriated cash? I guess it’s possible, but you’d think he’d have mentioned it. Or only mentioned the post-tax figure.

MORE: What is Carl Icahn up to with Dell?

It’s also possible that Icahn is offering a buffet of choices from which the Dell board could pick (“I’ll have $3.75 of the cash, $1.73 of the receivables and $3.52 of the debt. But, again, he doesn’t seem to be saying that.

No word on any of this yet from Icahn, who for now is letting his letter do the talking. If he does ring back, I’d also ask if he has any intention of offering an actual bid for Dell via the go-shop process…

Sign up for Dan’s daily email newsletter on deals and deal-makers: GetTermSheet.com

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