After months of legal wrangling this summer, it looks like Michael Dell will get his company back.
Billionaire activist investor Carl Icahn conceded defeat yesterday in his bid to prevent Dell Computer from being brought private in the bid led by Dell’s founder.
In a letter to shareholders, Icahn reiterated his opposition to the buyout, saying he believes Dell’s offer price is “70 percent below its 10-year high of $42.38” and that “the bid freezes stockholders out of any possibility of realizing Dell’s great potential.”
He said the approval by the Dell board earlier this summer of new voting rules, as well as an unfavorable court ruling in Delaware, made him realize he couldn’t block the $24-billion bid being offered by Dell and Silver Lake Partners.
“The Dell board, like so many boards in this country, reminds me of Clark Gable’s last words in ‘Gone with the Wind,’ ” Icahn wrote. “They simply ‘don’t give a damn.’ ”
Icahn, along with other opposing shareholders, had put the deal on hold this summer, forcing three delays of special shareholders meetings. But his withdrawal Monday evening now clears shareholders to consider the proposal at a previously scheduled meeting on Thursday. The current buyout offer is $13.75 a share, plus a 13-cent special dividend to be paid by the company.
The battle highlighted Dell’s storied past as a Texas innovation icon, one that began when Dell started his company as a teen-ager in his University of Texas dorm room three decades ago. But after 25 years as a public corporation and computer industry pioneer, Dell’s ties to Austin’s now established technology entrepreneurial scene has been frayed.
Dell has said the buyout was key to the company’s transformation as it seeks to build up business services in hardware and software and recapturing market share.
Icahn will certainly be watching. “We jokingly ask, ‘What’s the difference between Dell and a dictatorship?’ ” he wrote. “The answer: Most functioning dictatorships only need to postpone the vote once to win.”
