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By | Brid-Aine Parnell 24th May 2013 15:29

Investor Icahn needs a loan of $7bn to tick off Mike Dell

I do not like it, SAM-I-am. I do not like Michael's big plan

Activist investor Carl Icahn will need as much as $7bn to carry off his plan to pull Dell out from under Mike Dell's nose, banking sources have said.

The shareholder and his partner Southeastern Asset Management (SAM) have started talks with banks and financial firms to get bridge loans of up to $7bn for their plan to plough money back into Dell rather than letting Mike and his mate Silver Lake Partners take the firm private.

Sources told Thomson Reuters LPC that Jeffries and Co, the investment bank that's leading the deal, has already committed $1.6bn and is looking for commitments as large as $1bn from other lenders.

Mike Dell and Silver Lake Partners have put forward a plan to take Dell private at a price tag of $13.65 per share, or $24.4bn, and already have backing for around half of their plan from banks and Microsoft.

Icahn and SAM countered the deal earlier this month, proposing that shareholders get the option to hang on to their existing stock and get an extra $12 in either cash or shares. They argue that Mike Dell's offer undervalues the company, which still has a lot of potential in the enterprise services market. ®

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