Icahn Strikes Back; Buys 4 Million Shares of Dell

Jacob Harper |

Billionaire investor/ corporate raider Carl Icahn isn’t one to just quietly back away from a battle. He’s been butting up against Dell Inc (DELL) CEO Michael Dell to try to wrest control of the company since early 2013. What started out as a three-way battle for control of the beleaguered tech company has whittled down to two, as Blackstone Group LP ($BX) withered away. Now, it’s just Icahn and Dell, two billionaires fighting tooth and nail to take control of the once-largest PC maker in the world.

At various times, it has looked like the special committee voting on the buyout could go either way. But after a development last week, where Dell, backed by partner SIlver Lake Group, raised his buyout offer to $13.75 a share with a special, one-time $0.13 a share dividend (valued at $230 million, financed by Dell personally) it increasingly looked like the committee was leaning Dell's way and he had an easy road ahead of him. But now, with Icahn solidifying his stake in the company and raising his total ownership to 9 percent, Dell might once again have to restrategize.

Icahn is aggressively pushing to move the vote for the buyout to Oct. 17 – the same date as the annual stockholder meeting. If that were to happen, Icahn would likely stage a coup d'état and try to oust Dell’s board.

The shareholder vote on the offer is scheduled for Sept. 12. It has already been delayed twice as the two try to establish a dominant position.

Icahn and Dell have wildly different offers and plans for the company’s future. Dell wants to take the company private with his offer, in an attempt to create breathing room while it refigures its strategy. Icahn is offering a much higher buyout price (he claims it will be worth as much as $15.50 a share) and will leave the company public, but his plan is far more complex, and leverages much more debt.

Icahn has certainly been on the losing side lately. On July 8, an influential advisory board recommended shareholders voted with Dell over Icahn. Dell’s offer at the time was for $24.4 billion, which has increased considerably with the 10 cent a share raise and 13 cent special dividend.  Icahn has referred to the offer as an “insult” to stockholders.

Dell edged up on the buying spree, which is likely what Icahn wanted to happen. The stock is up .40 percent to hit $13.73 a share.

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Companies

Symbol Name Price Change % Volume
BX The Blackstone Group L.P. Representing Limited Par 25.00 -0.46 -1.81 5,416,835
PPCGF President Energy Plc 0.17 0.00 0.00 0

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