WILMINGTON, Del. -- Carl Icahn says his legal challenge to the
shareholder vote on Michael Dell and Silver Lake's buyout offer for
Dell Inc. (DELL) could be the deciding factor in whether investors
in the computer maker have a choice in the company's future.
Filed Aug. 1 in Delaware's Court of Chancery, Mr. Icahn's suit
says a special committee of Dell's board tilted the field unfairly
against his proposal for a leveraged recapitalization, which he
says is superior to the buyout proposal from the company's founder
and his private-equity ally, Silver Lake.
On Sunday, Mr. Icahn blasted the Dell directors, saying they are
using "self-granted imperial status" to boost the chances of Mr.
Dell's proposal being approved, by setting a Sept. 12 vote date for
Mr. Dell's proposal, and an Oct. 17 date for the annual meeting.
Mr. Icahn has been hoping to use an annual meeting to gain control
over Dell's board, setting the stage for consideration of the
recapitalization. The timing, Mr. Icahn contends, was done to "rig
the vote in favor of Mr. Dell's merger--a merger that the
stockholders plainly deem to be grossly underpriced."
Wednesday evening, Mr. Dell fired back, calling the Icahn
lawsuit "in reality just another soapbox for Mr. Icahn's public
spat with the special committee" of Dell's board. He sweetened his
offer for the company recently, adding some $350 million in
additional value to the $24.4 billion proposal.
Mr. Icahn and his allies are attempting "to use this court as
another theatre in their public relations battle and proxy fight,"
Mr. Dell's attorneys said.
Dell Inc. also filed papers Wednesday arguing that Mr. Icahn's
push for a joint shareholder meeting on his board slate and Mr.
Dell's buyout offer is the "latest maneuver by the Icahn Group in
its attempt to defeat the merger proposal by Michael Dell and
affiliates of Silver Lake Partners...without making an all shares
acquisition offer of their own."
The exchange of briefs comes in advance of a Monday hearing
where Chancellor Leo Strine is expected to decide whether to put
the lawsuit Mr. Icahn filed Aug. 1 on the fast track. With
financing for his planned leveraged recapitalization set to expire
Sept. 30, Mr. Icahn said, Dell shareholders won't get a chance to
pick between the two alternatives, unless the company holds its
annual meeting at the same time as the vote on Mr. Dell's
buyout.
In court papers Wednesday evening, Dell's attorneys said the
threat of shareholder harm was "purely speculative." With the bulk
of the financing for the leveraged recapitalization coming from Mr.
Icahn, there's no reason the door must shut on the competing offer,
company attorneys said.
Write to Peg Brickley at peg.brickley@wsj.com
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