Carl Icahn Likely To Oppose Dell Buyout

Posted: March 6, 2013

Investor Carl Icahn owns six percent of Dell, and several insiders believe he will use his 100 million share stake to oppose the upcoming company’s public-to-private buyout.

Sources close to negotiations claim that Icahn met with Dell’s special committee and urged them to offer a one-time dividend to shareholders. Icahn didn’t get the traction he had hoped for during his Dell meeting and will likely join Southeastern Asset Management’s opposition to the privatization deal.

In order for Dell to remove itself from the stock exchange and become a private company, it must receive a shareholder majority vote. Michael Dell, the company’s largest shareholder, is not included in that vote.

If Carl Icahn partners with Southeastern Asset Management, they would have a 20 percent voting share in opposition of the buyout.

Southeastern Asset Management has the most to lose if the deal should come to pass. The company would give up approximately $825 million. Southeastern CEO Mason Hawkins is a force to be reckoned with, having railed against company’s that have been mismanaged.

In the meantime, Michael Dell and his board of directors argue that Dell remaining a public company will only further hurt investors. Dell points to the company’s refusal to introduce new products for fear they might mess up the company’s other holdings.

Michael Dell and his team hope to take the company private and then release such groundbreaking options as the Dell Ophelia, a USB stick computer that connected to Windows, OS X, Linux, and other operating systems in the cloud.

An outside firm was brought in to help with the public-to-private transition.

Throwing its support behind Michael Dell is Microsoft. The tech giant recently offered to purchase $2 billion worth of the company should it make its way back into the private sector.

Do you think Dell going private is best for the company, or is Carl Icahn right to fight against the privatization of Dell?