Time for a quick roundup of network-related news this week from Hibernia Networks, XO Communications, 24/7 MidAtlantic, and Earthlink:
Hibernia Networks won a 100GE deal with the Dutch network operator Atrato Communications. The multiple 100 Gigabit Ethernet pipes will bolster Atrato’s IP backbone within Europe. I hadn’t realized that Atrato’s backbone was scaling so well as to need that much bandwidth, although last month they deployed their third 100GE port at AMS-IX so perhaps I should pay more attention.
Speaking of AMS-IX, they continued to rack up their international partnerships by teaming up with Etisalat. According to Capacity, AMS-IX is leveraging the UAE-based carrier’s Smarthub facility to extend the reach of the giant internet exchange into the Middle East and Africa.
XO Communications continued to flesh out the more advanced end of its networking offerings by rolling out an intelligent WAN solution. They’re taking aim at enterprises with more sophisticated needs by combining their MPLS IP-VPN, security, and applications performance monitoring capabilities in a unified solution. It’s hard to believe that it’s been a year and a half already since Icahn squeezed out the minority shareholders and took the company private. It still feels as if the other shoe will have to fall eventually, but nothing seems imminent.
24/7 Mid-Atlantic says it is supplying dark fiber to a global communications carrier out on its unique footprint on the Delmarva peninsula. The fiber sale spans 100 miles between Salisbury MD and New Castle DE, on a route which offers another alternative to the I-95 corridor in reaching the DC metro area from the north. 24/7 was bought by the GRI Fund II last March, giving it a shot in the arm in terms of funding.
Earthlink (NASDAQ:ELNK, news, filings) announced a new contract in the enterprise vertical today. RE/MAX Allegiance is tapping them for an 18-site hosted voice and MPLS network in Maryland, Virginia, and the District of Columbia. That sounds like exactly the kind of business they’d like to sell more and more of as they transform from CLEC into managed IT/network services provider. CNSG facilitated the deal, helping to tailor the overall package to the realtor’s needs.
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Categories: CLEC · Fiber Networks · VoIP
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What a hypocrite. This guy is amazing.
Here is the text of Mr. Icahn’s letter to the special committee of Dell’s board:
We are substantial holders of Dell Inc. shares. Having reviewed the Going Private Transaction, we believe that it is not in the best interests of Dell shareholders and substantially undervalues the company.
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 shareholders, 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.
We believe that such a transaction is superior to the Going Private Transaction because we value the pro forma “stub” at $13.81 per share using a discounted cash flow valuation methodology based on a consensus of analyst forecasts. The “stub” value of $13.81 combined with our proposed $9.00 special dividend gives Dell shareholders a total value of $22.81 per share, representing a 67% premium to the $13.65 per share price proposed in the Going Private Transaction. We have spent a great deal of time and effort in determining the $22.81 per share value and would be pleased to meet with you to share our analysis and to understand why you disagree, if you do.
We hope that this Board will agree to adopt our proposal by publicly announcing that the Board is committed to implement our proposal if the Going Private Transaction is voted down by Dell shareholders. This would avoid a proxy fight.
However, if this Board will not promise to implement our proposal in the event that the Dell shareholders vote down the Going Private Transaction, then we request that the Board announce that it will combine the vote on the Going Private Transaction with an annual meeting to elect a new board of directors. We then intend to run a slate of directors that, if elected, will implement our proposal for a leveraged recapitalization and $9 per share dividend at Dell, as set forth above. In that way shareholders will have a real choice between the Going Private Transaction and our proposal. To assure shareholders of the availability of sufficient funds for the prompt payment of the dividend, if our slate of directors is elected, Icahn Enterprises would provide a $2 billion bridge loan and I would personally provide a $3.25 billion bridge loan to Dell, each on commercially reasonable terms, if that bridge financing is necessary.
Like the “go shop” period provided in the Going Private Transaction, your fiduciary duties as directors require you to call the annual meeting as contemplated above in order to provide shareholders with a true alternative to the Going Private Transaction. As you know, last year’s annual meeting was held on July 13, 2012 (and indeed for the past 20 years Dell’s annual meetings have been held in this time frame) and so it would be appropriate to hold the 2013 annual meeting together with the meeting for the Going Private Transaction, which you have disclosed will be held in June or early July.
If you fail to agree promptly to combine the vote on the Going Private Transaction with the vote on the annual meeting, we anticipate years of litigation will follow challenging the transaction and the actions of those directors that participated in it. The Going Private Transaction is a related party transaction with the largest shareholder of the company and advantaging existing management as well, and as such it will be subject to intense judicial review and potential challenges by shareholders and strike suitors. But you have the opportunity to avoid this situation by following the fair and reasonable path set forth in this letter.
Our proposal provides Dell shareholders with substantial cash of $9 per share and the ability to continue as owners of Dell, a stock that we expect to be worth approximately $13.81 per share following the dividend. We believe, as apparently does Michael Dell and his partner Silver Lake, that the future of Dell is bright. We see no reason that the future value of Dell should not accrue to ALL the existing Dell shareholders – not just Michael Dell.
As mentioned in today’s phone call, we look forward to hearing from you tomorrow to discuss this matter without the need for us to bring this to the public arena.
Very truly yours,
Icahn Enterprises L.P.
By:
Carl C. Icahn
Chairman of the Board
I wonder if Adam Dell will start singing like a canary now that Icahn is trying to screw his brother.