Icahn bows out of battle for control of Dell
Activist investor Carl Icahn said on Monday he was bowing out of an effort to block founder Michael Dell's proposed buyout of Dell Inc, determining "it would be almost impossible to win."
New York: Activist investor Carl Icahn said on Monday he was bowing out of an effort to block founder Michael Dell's proposed buyout of Dell Inc, determining "it would be almost impossible to win."
The move will likely put an end to a battle that has raged since March between Michael Dell and privage equity firm Silver Lake Partners, who want to overhaul the company Dell created away from the investor spotlight, and stockholders like Icahn and money manager Southeastern Asset Management who want a higher price for their stock.
In a letter to shareholders, Icahn cited a change in the record date for stockholders allowed to vote on the proposed takeover by Dell and private equity firm Silver Lake, as well as a ruling that the gap period between the September 12 meeting and the annual meeting was legal.
Icahn had sued Dell and its board in an attempt to stop Dell from changing the record date by which shareholders must have purchased their shares in order to vote for the deal.
Under Delaware law, company annual general meetings have to be held within 13 months of each other or shareholders could sue to force one.
Delaware Court of Chancery Judge Leo Strine said last month Dell's October 17 date for the shareholder meeting would be considered overdue, but added it was not uncommon for corporations to hold late shareholder meetings.
Icahn, who is the second-largest shareholder in Dell with an 8.9 percent stake, had wanted to nominate a slate of directors to replace several board members, arguing that they are not acting in shareholders' best interests in accepting the CEO's deal.
"The Dell board, like so many boards in this country, reminds me of Clark Gable's last words in "Gone with the Wind," they simply "don't give a damn," Icahn wrote in his letter.
Dell was not immediately available for comment.
With Icahn's retreat, the odds are in favor of the CEO's deal being approved at the special meeting on Thursday. The meeting had been postponed three times as Michael Dell and Silver Lake struggled to round up the needed votes or convince "no" votes to support the deal.
Icahn and Southeastern Asset Management have repeatedly argued that the $25 billion proposal by Michael Dell and Silver Lake to take the company private undervalues the company.
Michael Dell has said the company's shift from a computer maker to a provider of enterprise computing services is best done away from public scrutiny.
While he would not pursue efforts to block the deal, Icahn said he still opposed it and would move to seek appraisal rights, according to the letter that he filed with regulators.
Icahn added that he was "saddened at our losing the battle to control Dell" but that because of his actions stockholders would receive more money that originally offered.
He congratulated Michael Dell and said he intended to call him to wish him good luck, promising he would continue to share his investment insights on Twitter.
Dell shares were relatively flat on Monday at $13.84.