Icahn bows out, saying Dell team is akin to dictatorship and CEO is undervaluing the firm
Activist investor Carl Icahn has given up his bid to prevent Michael Dell and his Silverlake team from buying out tech titan Dell.
Icahn hasn’t bowed out without some scathing final remarks, however, comparing Dell and his team to a dictatorship. His move follows a corporate judge’s decision in August to deny a request from Icahn to prevent Dell changing the voting conditions for the latter’s buyout plan.
It brings to a close a long battle between Dell and Icahn, which has seen the founder make a $24.9 billion bid to take the company private. The vote, due to take place on Thursday, has been delayed twice by the special committee planning the buyout.
Icahn has repeatedly said the offer was too low. Today, he claimed Dell was offering 70 percent below the company’s ten-year high of $42.38 per share.
“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,” Icahn said in a letter declaring his position.
“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.
“One of the great strengths of our country is that we abide by the rule of law. However, state laws dealing with corporate governance often favour incumbent corporate boards and management and are weak in many areas.
“While we must abide by these laws, we believe that they can and must be changed. Among many other things, boards should not be able to treat elections as totalitarian dictatorships do; where if they lose, they simply ignore the results.
“We therefore congratulate Michael Dell and I intend to call him to wish him good luck (he may need it).”
Michael Dell wants to go private so he can execute a shift in company strategy away from the company’s old PC business and further into the data centre and the services around it.
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