Dell, Icahn Battle Over Voting Rules in Struggle for Company
Calling the move “the latest installment of the Desperate Dell Debacle,’” Icahn accused the CEO of trying to rig the vote in his favor. “Michael Dell/Silver Lake this morning commented that the stockholder approval requirement is ‘unfair,’” he wrote. “Are they serious? They're complaining about the fairness of the Merger Agreement that they and their lawyers negotiated and agreed to! How is it fair to change the rules at the end of the game, particularly when they and their teams of lawyers established the rules?” Icahn urged shareholders to not only reject Michael Dell’s offer, but also to push the CEO out of the company and vote out the board of directors. Icahn and Southeastern Asset Management, another investor that believes Michael Dell’s offer undervalues the company, have issued a counteroffer that includes buying up to 1.1 billion shares at $14 each, with the option of investors buying more shares down the road for $20. It also would keep the company public.The original $24.4 billion bid has met with resistance since first being announced in February, with some shareholders believing the company is worth much more and that investors should be given the option of sharing in the benefits once the transformation is complete. In his July 24 letters to shareholders, Michael Dell defended his plan. “I believe that taking Dell private is the right thing to do for the company,” the CEO wrote. “We need to transform, and we need to do it quickly. The transformation is not without risks and challenges, and I believe that we can do what we need to do better as a private company than a public company.” Icahn poetically took to Twitter July 24 to let his thoughts be known: “All would be swell at Dell if Michael and the board bid farewell.”
Michael Dell’s deal would include buying all outstanding shares and taking the company private. The company, which like other tech vendors has been hit hard by the downturn in the global PC market, is in the midst of transforming from a PC hardware maker into an enterprise IT solutions and services provider.