This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Carl Icahn Retreats from Dell Takeover

NEW YORK ( TheStreet) -- Carl Icahn said on Monday he will not to continue to try and defeat Dell's (DELL) near-$25 billion takeover by company founder Michael Dell and private equity firm Silver Lake Partners, after a string of legal rulings and decisions by Dell's special committee tasked with selling the struggling PC-maker turned against the billionaire activist's competing proposals.

Icahn's decision likely cements Michael Dell and Silver Lake's takeover of the PC-maker, in what stands to be the biggest leveraged buyout since the financial crisis.

In a letter to Dell shareholders, Icahn said the decision by Dell's special committee to ( change the voting standard of the takeover and the record date of the leveraged buyout to September 12 proved an "impossible" hurdle for his contesting efforts to take control of the company and pay out its billions in cash to existing shareholders.

Silver Lake and Michael Dell asked that Dell's special committee agree to revise its merger agreement so absentee voters on a buyout transaction wouldn't be counted against the takeover consortium. In August, Dell's special committee accepted a 10-cent bid increase from the initial $13.65 a share offered by Michael Dell and Silver Lake Partners, along with a 13-cent special dividend as reason to change the voting standard of the transaction.

Dell's special committe said at the time that Michael Dell and Silver Lake's increased bid increased the payout to shareholders by $470 million and gave them an extra quarter's worth of dividend payments.

A Delaware count decided to uphold the change in the voting standard, another hurdle Icahn referenced in his Monday letter to shareholders. Icahn will still seek a higher price for Dell; however, he will do so by way of a court appraisal. Icahn also said that his involvement in Dell's LBO helped get shareholders a better deal.

"We have therefore come to the conclusion that we will not pursue additional efforts to defeat the Michael Dell/Silver Lake proposal, although we still oppose it and will move to seek appraisal rights," Icahn said on Monday.

Icahn last offer to shareholders was a $14 a share self-tender for about 72% of Dell's shares and a warrant, which Icahn said was worth up to $4 a share to investors. His proposal had the support of Southeastern Asset Management, Yacktman Asset Management and a number of large institutional investment funds.

"I realize that some stockholders will be disappointed that we do not fight on. However, over the last decade, mainly through "activism" we have enhanced stockholder value in many companies by billions of dollars. We did not accomplish this by waging battles that we thought we would lose. Michael Dell/Silver Lake waged a hard fought battle and according to Chancellor Strine, the actions by Dell were within the Delaware law. We therefore congratulate Michael Dell and I intend to call him to wish him good luck (he may need it)," the legendary activist added.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DELL $0.00 0.00%
AAPL $93.74 0.00%
NFLX $90.03 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs