Icahn files suit against Dell in buyout bid

02 Aug 2013

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Billionaire investor Carl Icahn has teamed up with major shareholder Southeastern Asset Management against proposed takeover of Dell Inc by Michael Dell and Silver Lake.

Icahn sued Dell and its board on Thursday, his latest attempt to derail a $24.4 billion buyout bid by the computer maker's founder and CEO Michael Dell.

Icahn also asked the Court of Chancery of Delaware to stop rule changes proposed by Michael Dell in voting.

Dell on February 5 said it has reached a deal to take itself private in a $24.4 billion buyout by Michael Dell. (See: Dell sells itself to Michael Dell and Silver Lake in a $24.4 billion deal).

The original buyout offer of $13.65 per share was up for a shareholder vote. Michael Dell and Silver Lake raised their offer price on a condition of the voting rules be changed, last week by 10 cents to $13.75 per share. (See: Micheal Dell raises offer by a dime to tweak voting rule).

As part of the deal, founder Michael Dell has wrestled back majority control of the computer firm with a 14 per cent stake and will remain as CEO. The buyout is expected to be complete by 5 November, according to a filing with the US Securities and Exchange Commission.

Icahn, who has stockpiled 8.7 per cent stake, views Dell's offer as too low.

Michael Dell and Silver Lake's new voting terms in a revised bid were rejected by Dell's special board of committee.

Michael Dell's demand caused an outrage among Dell Inc's major investors.

Talks between the buyout group and Dell's special board committee for a higher bid are continuing and they're ''making progress,'' CNBC reported on Thursday.

A vote on the buyout had been postponed twice and now for the third time the voting on the buyout is scheduled for today. The votes have been split evenly; sources are assuming that Michael Dell still has some voters aiming their votes at him.

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