A Delaware court will decide whether a lawsuit filed by Carl Icahn against the proposal by Michael Dell to take Dell private for almost $25 billion should be expedited, resulting in a setting for a face-off between the two billionaires.
Michael Dell and Silver Lake Management raised their buyout offer to $13.75 per share on Aug. 2. There would also be a special dividend of 13 cents per share plus a regular dividend of 8 cents per share in exchange for a change of voting standards which would ensure abstentions would no longer be counted as votes that oppose the buyout.
Icahn, in his Aug. 1 lawsuit against Dell and its board of directors, asked the court to force the computer giant to hold side by side votes on Michael Dell’s offer and then on Icahn’s proposal for a rival offer, which is to buyback 1.1 billion shares at $14 each in addition to one warrant for every four of their shares, which would allow stockholders to buy one Dell share for $20 over the next seven years.
Owning about 9 percent of Dell shares, Icahn contends that the buyout attempt by Michael Dell, who owns about 15 percent of the company’s stock, undervalues the company, according to Bloomberg.
Attorneys for Icahn will attempt to expedite hearings for the lawsuit, using grounds that shareholders will vote on Sept. 12 on the offer made by Michael Dell. The competing offer by Icahn is set to expire on Sept. 30. Dell’s executive board is set to vote on Oct. 17.
Chancellor Leo Strine of Delaware’s Court of Chancery could opt either way on whether to permit a speedy verdict on the lawsuit filed by Icahn, as Delaware courts traditionally hesitant to interfere in shareholder-voting procedures, observers and experts have indicated.
Icahn, who serves as chair of Icahn Enterprises, told the court in a statement that shareholders will be harmed if the case is not heard soon because Dell’s offer “is nearly certain” to come through as a result of recent changes in voting rules, reported Bloomberg.
In a statement to company shareholders just last month, Michael Dell said he believes taking the company private is “the right thing to do” and added, “Dell needs to transform, and we need to do it quickly.”
In July, Dell, who founded the company in 1984, had said he would continue to serve the company in the role of CEO even if his buyout plan fails. He has also indicated he would continue to fight Icahn, who has indicated the PC maker needs a new CEO.
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