Icahn withdraws from Dell fight

Maverick investor cites ‘impossible’ battle, accuses board of apathy

Tags: Dell CorporationMergers and acquisitionsUSA
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Icahn withdraws from Dell fight Carl Icahn has decided to stop his attempts to block the privatisation of Dell Inc. (Getty Images)
By  Stephen McBride Published  September 10, 2013

Billionaire maverick investor Carl Icahn yesterday announced his intentions to withdraw from the battle with Michael Dell and Silver Lake Partners over the future of Dell Inc, Reuters reported.

In a letter to shareholders, the activist financier described the war ahead with the company's board and founder to be "almost impossible to win".

"The Dell board, like so many boards in [the US], reminds me of Clark Gable's last words in ‘Gone with the Wind', they simply 'don't give a damn'," Icahn wrote in the letter, which he also filed with regulators.

Michael Dell had sought to take private the company he founded in his college dorm room, so that he could pursue an enterprise service model for the business away from public scrutiny. The world's number-three computer maker was suffering from the onslaught of heightened competition from tablets, which consumers were increasingly favouring.

Michael Dell and Silver Lake tabled an initial $13.65-per-share offer, but some shareholders, including Southeastern Asset Management, objected to a proposal they believed undervalued the company.

Icahn, after accruing a large stake, joined the battle, at one point nominating a new board and challenging a series of boardroom decisions in Delaware courtrooms. One such decision was the board's move to change shareholder voting rules, so that abstentions would not be counted as nay votes. Another was a ruling allowing voting rights for shareholders that had acquired Dell stock after news of the buyout had become public knowledge. Since these shareholders were mainly hedge funds and short-term holders eager to see the deal go through, Icahn argued that the deck was being systematically stacked in favour of Silver Lake and Dell.

Icahn's withdrawal from the boardroom fight will greatly increase the chances of the buyout deal passing a shareholder vote, which is to be held on Thursday. Icahn said he still opposed the offer and would move to seek appraisal rights.

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