(Reuters) - Activist investor
Carl Icahn sued
Dell Inc and its board on Thursday, his latest attempt to
derail a $24.4 billion buyout bid by the computer maker's founder and CEO
Icahn asked a court to block rule changes Michael
Dell has proposed ahead of a shareholder vote set for Friday.
Icahn and his affiliates also want the court to stop Dell from changing
the record date by which shareholders must have purchased their shares in
order to vote.
They want to stop Michael
Dell from voting any Dell shares acquired since February 5 at
any annual shareholder meeting. The February 5 date was when his buyout
bid was announced. The lawsuit also seeks the court to bar the company
from changing any shareholder voting requirements.
The lawsuit, filed in the Court of Chancery of Delaware, seeks to force
the company to call an annual shareholder meeting on the same day as the
special meeting on the buyout in case
Dell Inc sets a new record date.
"My personal reaction, bombastic," said Larry Hamermesh, a professor at
the Widener University School of Law in Wilmington, Delaware, referring to
the lawsuit. "The linchpin of it seems to be that it's inappropriate to
move or create a new record date because that takes advantage of a cynical
effort to put shares in the hands of arbitrageurs who will want to vote
for the deal."
Hamermesh pointed out that the judge who is likely to take this case, Leo
Strine, often made the point in the takeover battle by industrial gases
companies Air Products of rival Airgas that arbitrageurs are shareholders
with the same rights.
Icahn, who views Michael Dell's offer as too low, has amassed an 8.7
percent stake in Dell and is leading a charge with Southeastern Asset
Management against the buyout with an offer of his own. He has been
campaigning to get Dell to set a date for the annual shareholder meeting
so he can put up his own slate of directors for the company.
spokesman for Dell Inc declined to comment on the suit but said Dell board
has always sought to act in accordance with its fiduciary duties.
"Tenuous" talks between the buyout group and Dell's special board
committee for a higher bid are continuing and they're "making progress,"
CNBC said on Thursday.
The debate over the go-private transaction has dragged on for months,
jeopardizing the future of the computer maker facing a decline in its core
business of personal
computers amid the growing popularity of tablets. Michael Dell
has said a turnaround of Dell should be done away from the scrutiny of
THIRD ATTEMPT AT VOTE
vote on the buyout, which has been postponed twice, is now scheduled for
Friday and sources familiar with the matter have said another adjournment
The special committee has said it would put the original buyout offer of
$13.65 per share up for a shareholder vote.
Dell's special board committee rejected new voting terms in a revised bid
by Michael Dell and Silver Lake, which raised their offer price last week
by 10 cents to $13.75 per share on the condition the voting rules were
Currently, shareholders who abstain are counted as voting against the
deal, but the buyout group wanted those investors to be excluded from the
Michael Dell's unusual demand sparked outrage among major investors, but
the buyout group had said about 27 percent of the unaffiliated shares had
not yet been voted and the presumption that these shares should be treated
as if they had voted against the transaction was unfair.
The votes that have come in so far are split evenly between yes and no,
sources have said, but there appears to be some signs that Michael Dell
could get more votes.
Some of Dell's largest investors, who have abstained from voting on the
buyout, told the company's board this week that they would back the deal
at the buyout group's latest offer price, three sources close to the
matter have told Reuters.
Dell's shares closed up 2.3 percent at $12.96 on the
(Reporting by Poornima Gupta and Edwin Chan; Editing by Gerald E.
McCormick and David Gregorio)
©2013 Thomson Reuters.