Icahn bid to stall Dell's buyout offer fails
17 August 2013
Delaware Chancery Court judge Leo Strine Jr on Friday rejected billionaire investor Carl Icahn's bid to fast-track a lawsuit that could have stymied Michael Dell's buyout offer for the computer manufacturer.
Dell Inc shareholders of record on 13 August would now be scheduled to vote on the $24.9 billion buyout at a special meeting on 12 September. The shareholders could choose directors at an annual meeting on 17 October.
Strine, during yesterday's hearing, agreed with lawyers for the company who said Icahn had enough time for evaluation of the buyout and could have put in a bid.
"This court is not going to be dragged into a tactical game" between Icahn and Dell, Strine said.
Michael Dell, 48, and Silver Lake Management LLC initially offered $13.65 a share for the PC maker and in a sweetening of the offer increased the amount investors would net to $13.96 a share. Dell shares increased 12 cents to $13.82 in Nasdaq stock market trading. Icahn, 77, sued the board on 1 August for violation of duties under Delaware corporate law, for failing to get the best deal, and wrongly separating the special shareholders' meeting and the annual meeting.
According to Dell spokesman David Frink, the company planned a shareholder vote on the buyout on 12 September.
Icahn had hoped to head off the vote as he wanted that the company hold its annual general meeting - at which he would try and replace the board - at the same time as the vote, in a move to force the CEO to put his best and final offer on the table.
However, Strine rejected the argument that Dell Inc, and the special committee formed to review the buyout offer, was trying to push the CEO's deal at the expense of shareholders.
According to commentators, the broader conflict between CEO Dell and Icahn added to the uncertainty of the situation in which a company that once ruled the global personal computer market, was now trying to move into the relatively unfamiliar field of enterprise computing services as sales of computers shrunk in the face of increasing demand for mobile devices and laptops.
The 77-year-old New York investor, who specialises in buying stakes in companies in flux and pushing for change had in recent battles taken on the management at Biogen and Transocean Ltd.
With an 8.9 per cent stake in Dell Inc, Icahn is the second-largest shareholder behind Michael Dell, with about 16 per cent.