This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Carl Icahn Retreats from Dell Takeover

Stocks in this article: DELL AAPL NFLX

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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs