Dell proxy fight looms

Icahn refuses to drop tough talk, presses for dividend

Tags: Dell CorporationMergers and acquisitions
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Dell proxy fight looms Icahn: I'm not going to give up the right to put in a bid that I think will be compelling to shareholders. (Getty Images)
By  Stephen McBride Published  April 7, 2013

Carl Icahn, the billionaire investor that accrued a 6% stake in Dell Corp during the company's recent go-shop period, has chosen not to honour the Dell board's call to drop his threat of a proxy fight, the Wall Street Journal reported.

Upon building his $1bn holding, Icahn voiced his opposition to founder Michael Dell's leveraged buyout proposal, which had already been condemned by other major stakeholders as being unrealistic. The maverick financier initially favoured capital restructuring for the number-three PC maker.

Now Icahn is trying to force the board to authorise a large dividend payment to shareholders and reimburse him for the cost of his due diligence on Dell, which is a courtesy that has reportedly already been extended to rival suitors Silver Lake Partners (Michael Dell's buyout partner) and Blackstone Group LP.

Both Icahn's and Blackstone's initial bids outmatch that of the Silverlake-Dell proposal of $13.65 a share. But while Icahn has yet to formalise his offer, Blackstone is said to be preparing to visit Dell HQ, which may indicate that it is pressing ahead with its bid.

"No matter how much they [the board] are willing to pay to reimburse me [for the due diligence process] I'm not going to give up the right to put in a bid that I think will be compelling to shareholders, even if the board doesn't like it," Icahn told the Wall Street Journal.

Michael Dell had originally sought to take private the company he founded in a college boardroom. Dell's failure to reap the tablet market has led to analyst speculation that the company needs to grab a larger share of the enterprise segment and the company would best build a viable enterprise business model away from the prying eyes of the public-trade arena.

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