Icahn ends takeover battle for Dell

Investor says buyout offer was too low

Los Angeles TimesSeptember 9, 2013 

After months of bitter fighting over the future of computer maker Dell, Carl Icahn said in a sharply worded letter Monday that he was giving up.

That appears to clear the way for Chief Executive Michael Dell to take the company he founded private during a shareholder vote set for Thursday.

But Icahn didn’t go quietly. He directed some final jabs at Dell, reiterating that he still thought the founder’s buyout offer was too low, and compared the company’s board – which postponed the shareholder vote numerous times and changed the voting rules to better Dell’s takeover chances – to a dictatorship. He noted that “some stockholders will be disappointed that we do not fight on.”

Icahn’s departure plus a recent change to Dell’s shareholder voting rules should solidify Dell’s victory during Thursday’s vote at the company’s headquarters in Round Rock, Texas.

Before the vote change, shares not cast counted as “no” votes; now the outcome of the vote depends solely on actual votes cast. Dell also pushed back the date of record for stockholders entitled to vote.

Those last-minute maneuvers angered Icahn.

“We won, or at least thought we won, but when the board realized that they lost the vote, they simply ignored the outcome. Even in a dictatorship when the ruling party loses an election, and then ignores its outcome, it attempts to provide a plausible reason to justify their actions,” Icahn said. “We jokingly ask, ‘What’s the difference between Dell and a dictatorship?’ The answer: Most functioning dictatorships only need to postpone the vote once to win.”

Still, Icahn said, he wished Dell and his company well – sort of.

“We therefore congratulate Michael Dell and I intend to call him to wish him good luck (he may need it),” he said.

Dell is hoping the going-private move will help the struggling computer maker re-invent itself away from the glare and pressures of Wall Street.

Under Dell’s revised proposal, announced in July, he and investment firm Silver Lake would acquire the PC maker for $13.75 per share in cash, up from the group’s previous offer of $13.65 per share. That bumps the value of the bid to $24.6 billion, up from $24.4 billion.

In Icahn’s most recent bid, Dell shareholders would have received $14 a share and a warrant for every four shares they tender. The warrants could be used to purchase Dell shares for $20 in the future.

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