|By Maureen O'Gara||
|July 29, 2013 04:26 PM EDT||
Carl Icahn and Southeastern Asset Management sent Dell's special board committee an open letter first thing Monday morning urging its members, who are supposed to be watching out for the interests of Dell shareholders, not to change the rules governing the upcoming shareholder vote on whether to accept Michael Dell's offer to buy the company.
Icahn and Southeastern claimed that Michael and private equity house Silver Lake Partners are trying to subvert the rules they had agreed in writing could not be waived by demanding that shares that aren't voted not be counted. The rules agreed on would count abstentions as "no." In exchange Dell and Silver Lake would raise their bid from $13.65 a share to $13.75.
According to the letter, Dell and Silver Lake "have been unable to achieve the required stockholder approval and have now offered to pay a dime for a new method of voting designed to prevent stockholders from passively dissenting on the proposed merger. This is a cynical attempt to circumvent process."
The letter maintains that shareholders who oppose the deal counted on their abstentions being tallied against it. "We trust that you will see this for what it is and recognize that proper protections for stockholders of Dell should not be offered for sale to anyone at any price," the letter says, characterizing the abstention stipulation as "one of the most important and maybe the only safeguard for stockholders included in the merger agreement."
Icahn and his party don't want any changes in who gets to vote either.
If the vote on the transaction, already delayed twice, is pushed out past Friday August 2 the eligibility rules would change. They want the vote to go ahead Friday and, figuring that the leverage buy-out will go down in defeat, Icahn and his cronies want an annual stockholders meeting scheduled so they can attempt to unseat the current board and install their own partisans.
Evidently in response to a Bloomberg report that the special committee wants $14 a share to change the rules, Michael Dell said over the weekend that $13.75 a share is as good as it's going to get and that he'll hold on as CEO, aiming to upset Icahn's complicated plans to loot the company. Icahn, meanwhile, has said he will install his own CEO.
Dell stock closed Monday at $12.86, down another eight cents, although it had slipped to $12.71 earlier in the day.
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