Icahn criticizes Dell for vote rule change on proposed deal

Icahn urges Dell board to not adopt the rule change for shareholder vote proposed by Michael Dell and Silver Lake

The takeover bout for Dell resumed on Monday, with investor Carl Icahn sounding off on the proposal from Michael Dell and Silver Lake Partners to change rules governing the shareholder vote for a revised bid to take the PC maker private.

Company founder Michael Dell and his buyout partner, Silver Lake, last week offered shareholders US$13.75 per share for the company, an increase from the $13.65 proposed in February. As part of the revised offered, the parties proposed a change in the shareholder vote in which only "yes" or "no" votes will be counted, and non-votes or abstentions will not count.

Icahn on Monday urged Dell's board not to support the proposed shareholder vote change as it could disenfranchise voters.

"The plain and simple fact is that Michael Dell and Silver Lake have underestimated the extent of stockholder opposition to the Michael Dell/Silver Lake transaction and are unwilling to pay fair value to obtain approval of their interested-party freeze-out transaction," Icahn wrote in a statement.

Many shareholders may not have voted "because they knew that their inaction would count as a vote against the merger," Icahn said.

The final shareholder vote on the deal is due on Aug. 2 after being delayed twice. Analysts said that Michael Dell may have failed to get enough shareholder backing to take the company private, which prompted him to raise the bid and propose the vote rule change. Michael Dell noted that according to the voting rules previously in place, abstentions would automatically count as "no," but that would not be a fair representation of the true wishes of all shareholders.

"According to our latest tally, approximately 27 percent of the unaffiliated shares have not yet been voted. The presumption that these shares should be treated as if they had voted against the transaction is patently unfair," Michael Dell and Silver Lake said in a statement issued last week. Unaffiliated shares are shares not tied to Michael Dell's 16 percent share. For the Dell-Silver Lake bid to go through, a majority of shareholders not including Michael Dell need to approve it.

Some shareholders opposed Dell's earlier proposal because they believed the company was being undervalued. Several shareholder advisory firms, however, recommended shareholders vote in favor of the deal because Dell's value as a public company may fall as the PC market weakens.

Icahn has put out many statements criticizing Dell's board as he leads the battle against the company being taken private by the founder. Michael Dell, in an interview this week with the Wall Street Journal, said he will not budge from the current proposal, saying $13.75 per share is the "best and final offer." He also said the he would want to remain with the company even if the deal falls through.

Analysts have said that any deal may take a long time to close if Icahn seeks legal recourse in the courts against Dell's board for accepting an offer that is not in the interest of shareholders.

Join the PC World newsletter!

Error: Please check your email address.

Tags business issuesDellMergers and acquisitions

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?