Billionaire investor Carl Icahn plans to seek a higher price for his Dell shares in court and urged other investors to do the same, in an effort to block Dell founder Michael Dell’s US$24.4 billion (HK$189.3 billion) buyout offer ahead of a key shareholder meeting.
Icahn opposes the proposal from Michael Dell and private equity firm Silver Lake, arguing it undervalues the PC maker, and has put forth a number of alternative options in concert with fellow Dell shareholder Southeastern Asset Management.
Earlier this week, however, shareholder advisory firms Institutional Shareholder Services, Glass Lewis and Egan Jones threw their support behind Michael Dell’s offer.
In his latest effort to derail Michael Dell’s plans, Icahn wants shareholders to vote against the buyout and then ask a court in Delaware, where Dell is incorporated, to appraise the fair value of the shares.
“We believe if you seek appraisal, you will receive more,” Icahn said in a letter to Dell shareholders.
Icahn said Dell shareholders could change their minds about the appraisal up to 60 days after the merger.
During that time “we believe Dell may wish to negotiate with those that sought appraisal and possibly pay a premium over US$13.65 to get them to settle and drop their appraisal claims,” he said.
Should shareholders change their minds they can still sell for US$13.65, Icahn said in the letter, adding “you can have your cake and eat it too.”
Dell shareholders are scheduled to vote on the buyout offer proposed by Michael Dell and Silver Lake on July 18.
On Tuesday, Yacktman Asset Management, which owns about 0.85 per cent of Dell stock, said it favoured Icahn and Southeastern’s proposal that would see shareholders tender 1.1 billion shares at US$14 each.
For that bid to be put to a vote, shareholders must reject Michael Dell’s proposal and then elect a new slate of directors put up by Icahn.
Icahn and Southeastern together own almost 13 per cent of Dell’s stock.