Icahn sues Dell in buyout retaliation

Icahn sues Dell in buyout retaliation

Summary: One day before shareholders will vote on a $24.4 billion buyout proposal, Icahn files suit alleging fault.

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TOPICS: Dell
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Billionaire Carl Icahn, Dell Inc.'s second-largest shareholder, filed a lawsuit on Thursday to try to block the company from changing the record date of shareholders who may vote.

The company's board had said it would be willing to accept new shareholders into the vote beyond the existing June 3 record date despite rejecting its chief executive's proposal to raise his bid to $13.75 per share, contigent on eliminating abstaining votes from the tally.

Icahn wants to ensure that if the record date is changed, the special vote and the annual shareholder meeting will be held on the same date. He also requests founder Dell and "affiliates" be prevented from voting any new shares of the company picked up since February 5.

The suit, filed in the U.S. state of Delaware, comes a day before Dell's special shareholder vote will be held.

Icahn alleges that the company "breached fiduciary duties" as it evaluated its proposed $24.4 billion buyout by chief executive Michael Dell and Silver Lake Partners, according to initial reports. He has offered tough words for the proposal in recent days as Dell and his partner scurry to shore up support for their sweetened proposal.

Topic: Dell

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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5 comments
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  • Icahn should get a life...

    It's rather funny, you start to feel sorry for people with too much money.

    They just get too greedy and it becomes an illness, whats worse they don't realist it.
    pjc158
    • The Greatest Fear of rich people...

      ...is losing some of that money.
      Icahn made a wrong bet a didn't get payout he expected (i think he did the same with Yahoo - remember how he was pushing for MS-Yahoo deal?). And now he tries to do to Dell what he did to TWA (remember them?).

      To me he really is pathetic loser in this.
      vgrig
  • Icahn, please go away.

    The Dell company -- nay, the whole PC industry -- is facing a tough future. It must shift its ideology and focus to "post-PC" products and services. It certainly seems to me that Michael Dell is well-aware of this fact, and is ready to grab the proverbial bull by the horns and lead his company boldly into the future.

    I have done some reading on Carl Icahn (Google him if you haven't), and he appears to be little more than a greedy, ruthless corporate raider who has a proven track record of hostile takeovers, followed by company breakups and sell-offs, handsomely lining his own pockets while leaving a smoldering trail of fail and destruction in his wake. He has made no secret about his slash-and-burn plans for Dell either: "It is time for Michael Dell and the Dell Board to go." How smug can he be?!

    I don't know either of these men personally, nor do I know all of the details of the proposed buyout or the boardroom politics involved, so I am certainly in no position to pass judgement on any of this. BUT, as a strictly outside (and slightly educated) observer, the whole Icahn thing just plain stinks.

    Michael Dell founded and built his own company into one of the premier PC hardware manufacturers in the world. If he has some ideas about the future of the marketplace and the direction he would like to steer *his* company in, well then, Hip Hip Hooray, Boy Howdy! Please tell me how Icahn, a rapacious 77-year-old man, net worth ~$20B, clearly driven by his own avarice, comes to know so very much about what's best for Dell Corp.?

    Bloody Hell, the very technology industry iteslf is a topsy-turvy rollercoaster -- a fickle beast which changes direction almost daily. The truth is that Icahn knows just about Jack Diddly Squat about technology, couldn't really care less, and is simply eyeballing the fat pockets of Dell investors as he prepares to try to harpoon this whale of a takeover opportunity.
    BGunnells
  • Master Joe Says...Again?

    This reminds me of the Yahoo situation a few years back. Icahn wasn't happy with how things were going, and he ended up with a spot on the board. He seems to have an MO going here, and I agree with the rest of the above posts that the tech industry is better off without him. The technology industry has always been known for its agility and its ability to make rapid, progressive changes. Icahn, like so many of the upper 1%, doesn't have even the slightest clue about how this industry works, nor does he care to. Unfortunately, there are two truths about the US these days. First, money can't buy you happiness, but it can buy you everything else in this country, which makes some people happy. Second, anyone with enough money can overrule a democratic majority any day. This is true in politics and business alike. The only difference here is that the technology industry wasn't entirely formed and grown by big businessmen. People like Gates, Jobs, and Wozniak weren't millionaires or billionaires with more money than brains (some might argue that Jobs didn't have too much of either, but that's neither here nor there). The point is that the technology industry has always been somewhat set apart from traditional businesses because it evolves and changes much faster than other aspects of the business and is often the driving force behind changes to a business or process. Unfortunately for the smaller shareholders, Mr. Icahn sees an opportunity to further expand his own wealth and power, while showing a complete lack of concern for the "little guy" who will likely see much less profit, if any at all, out of all of this. If Dell (the company, not Michael himself) goes down in flames, Icahn couldn't care less, as long as he makes a profit. Too bad not enough people in this country care to do anything about it.

    --Master Joe
    SteelCityPC
  • Still tuck in the 80's

    It's almost like Icahn is stuck in the original Wall Street movie. I can see him thinking of himself as Michael Douglas stating that greed is good.
    He is still a minority shareholder. If not for the greed of others he wouldn't stand a chance.
    Sad.
    harrim47