Icahn: I'm done with Dell; Michael can have it

Icahn: I'm done with Dell; Michael can have it

Summary: Michael Dell gets to take his company private now Carl Icahn is gone after a few verbal jabs. Now what?

TOPICS: Hardware, Dell, PCs

Carl Icahn has ended his chase for Dell, essentially leaving the company to founder Michael Dell and Silver Lake's best and final offer. Icahn, however, landed a few verbal jabs on the way out.

Michael Dell gets to take his company private now Carl Icahn is gone. Now what?

When we last left the Dell saga, Michael Dell and Silver Lake upped its offer to take the company private to $13.75 a share with a 13 cent per share special dividend. That bid basically matched what Icahn was offering.

Icahn said in a letter to Dell shareholders that the company was run by a dictatorship and said Michael Dell and dictators had a lot in common. Icahn said:

Although the board accepted Michael Dell/Silver Lake’s offer in February, it promised stockholders that the Company would hold a meeting at which stockholders could make the final decision as whether or not to accept the transaction. The board recommended that stockholders vote in favor of the proposed transaction because it was Michael Dell/Silver Lake’s “best and final offer”. Icahn and Southeastern argued that stockholders should not give up the huge potential of Dell and therefore should reject the proposed transaction. 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. Andrew Bary at Barron’s wisely observed, “In an action worthy of Vladimir Putin, Dell postponed a vote scheduled for last Thursday on Michael Dell’s proposed buyout of the company when it became apparent that there was insufficient shareholder support for the deal.” But the Dell board felt they needed no excuse when they changed the voting standard and changed the record date of those eligible to vote, which allowed arbitrageurs to vote a much greater percentage of the stock when the polls reopen and scheduled the annual meeting for October. The board simply relied on the usual “business judgment” catchall and Delaware law to uphold their actions. 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.

Icahn said he couldn't win, but did note that his activism improved shareholder value. Icahn said:

While we of course are saddened at our losing the battle to control Dell, it certainly makes the loss a lot more tolerable in that as a result of our involvement, Michael Dell/Silver Lake increased what they said was their “best and final offer”.

Topics: Hardware, Dell, PCs

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  • Now what?

    Dell shares dip a bit, the board sells off their interests, share holders get bought out and then the company flat lines eventually going into a prolonged and painful decline independent of investors. Of course, under ICANN, the company would have flat lined, made ICANN lots of money, eventually going into a prolonged and painful decline taking investors down. So, same difference...DELL used to mean quality and affordability, but they copied the Gateway business model and so followed Gateway into decline.
    • We must wait and see...

      Maybe Michael Dell can improve Dell, now that he will have direct control. I sure hope so.

      Look at Apple when Steve Jobs was there in the beginning and how it started to go down once he was pushed out. They had to bring him back to keep Apple healthy, and Steve did more than that. Too bad he's not around any longer, as he always had the vision of things to come, but at least the folks left behind at Apple can still make iPads, iPods, iMacs, and iPhones for a long time.

      Now, I understand Michael Dell is no Steve Jobs, but the original owners of a company almost always have a better vision for that company than outsiders do. So, let's hope that Dell will be a better company by going private.
  • So I guess Mike is following his advice

    Closing up shop and giving the money to investors?
    • Nope. dumping greedy investors and keeping the money for himself

      On the other hand, Ichan sounds like a sore loser.

      I guess he's not accustomed to having his prey fight back,.
      William Farrel
  • Sore loser comes to mind

    Whenever Icahn does not get his way (which is not often) he resorts to name calling. He's like the kid on playground who takes his ball and goes home when he doesnt get the team he wants.
  • I can only hope this means an improvement of the product

    But I don't expect it. Having gone private, I expect their quality to fall even lower.
    • Let's hope not...

      What's important here is the Michael Dell will have control of his company again. Let's hope he can improve Dell in a similar way that Steve Jobs improved Apple on his return to control.
  • Icahn't

    Carl Icahn sounds like the proverbial "Sour Grapes".
    He couldn't succeed as a vulture, so now it's time to go sulk.
    • Agreed

      I really, really, really enjoy seeing such vultures lose their fight. They all think way too highly of themselves. It's also funny to see them whine when they lose. :)
  • Sounds Good To Me

    As a longtime dell owner and Windows sufferer from Ver. 3.1, I would like to see the company dump the ever changing "change for change sake" Microsoft OS and come up with one that would run everything and be backward compatible much like Apple. I refuse to go the tablet wannabe touch screen way. I have an iPhone toy for that. Right now, with the way Microsoft is heading with their tablet junk, I'm considering going to Apple regardless. Perhaps I'm ignorant of the real facts but it is simply my view.
    • Fat chance

      That would be great if they went to Linux and things would actually work but I doubt it. Hopefully Dell just fades away. There computers suck anyway.
  • Michael, bring Dell back to the leading edge

    Years ago, when it was essentially a Dell, Compaq, and IBM race, Dell was the leading edge, performance choice, Compaq was reliability, and IBM was old business. We were proud to provide and work with Dell products.
    In recent years, Dell has become the low cost provider. Where Packard Bell used to focus on price at the cost of quality, Dell has followed.
    Now, why would you choose Dell over HP, Lenovo, Samsung, Asus, or Acer?

    I personally use an Asus Zenbook Prime, which Dell doesn't have any real competitors for, and love it.

    My hope, is that with this deal Michael Dell can bring his company back to greatness, similar to how Steve Jobs was able to affect Apple.
    • Choose Dell...

      I have chosen Dell several times and have been happy with their desktop products. I would prefer them over all the computer companies you mentioned except ASUS.

      If I had a need for a laptop, I would definitely buy an ASUS. I wouldn't even consider any other maker. My son owns an ASUS gaming laptop and has had not trouble with it at all, and he's had it for a few years now. I would never buy an HP. The other companies might have good laptops, I don't know, but we did not have a good experience with the HP we owned.

      I've owned several Dell desktops and they work and work and work. I would buy an ASUS desktop in a flash if they offered what I want, personally, in a desktop computer, but they don't. They offer mostly mainstream computers. I would want a high end gaming computer but they just don't offer those. Dell, on the other hand, has their Alienware gaming desktop systems but I can never get the configuration I want from them. I would rather buy one of their new XPS desktops (my current one is an older 2009 model XPS 435T) with a Core i7 4930K processor and a GeForce GTX 780 3GB video card, but they don't sell that, nor do they in their higher end Alienware gaming computers. I can only get the older GTX 680 or 690 video card in their Alienware systems. So, I'm basically left to other companies such as CyberpowerPC and iBUYPOWER for lower cost computers, or companies that can give me exactly what I want but for a higher price, like Digital Storm, for example.

      So, I'm hoping that Michael Dell will improve Dell. I used to have a lot options I could choose from at Dell, but between 2009, when I bought my XPS, and now, Dell offers very few choices for me to configure the system I want to buy. I hope Michael Dell can change that so I can buy from them again.