Judge Junks Icahn Challenge To Dell Deal

Aug 19 2013 | 1:11pm ET

A judge Friday dealt a potentially fatal blow to Carl Icahn's hopes of blocking the sale of Dell Inc. to its founder and a private-equity firm.

Delaware Chancellor Leo Strine rejected Icahn's bid for an expedited hearing on most of his claims against the computer-maker, meaning they will not be heard before the Sept. 12 vote on the $24.8 billion deal, led by Michael Dell and Silver Lake Partners. Icahn had asked the court to overturn Dell's decision earlier this month to change the voting rules for the deal; the changes made, in addition to the extra money offered in exchange, make the buyout's approval all but a certainty.

Icahn himself seemed to realize that he had lost the battle for Dell, telling The New York Times, "I believe I made a competing bid that was superior. I am obviously disappointed that the judge didn't see it that way. But we did get $350 million more from Michael Dell for shareholders. We did the work the board should have done."

Strine did agree to expedite hearing of one of Icahn's claims, an effort to force Dell to hold its annual shareholder's meeting at the same time as a vote on the buyout. But even that was a Pyrrhic victory: Strine said that precedent would force Dell to hold the annual meeting within 30 to 90 days of the 13-month anniversary of its last annual meeting, but "under the relevant federal securities standards, it does not seem at all possible to have a compliant meeting on the time frame that the Icahn group suggests."

Strine noted that Dell has set an annual meeting date, Oct. 17, that falls within the 30-to-90-day period, and that he was inclined to accept it.

But, for the most part, Strine sided strongly with Dell, saying that the board and special committee handling the sale—groups that Icahn has assailed—have done a good job.

"Under our law, deference is due to independent directors," Strine said, adding, "I'm not sure what other leverage they really had." And he said changing the record date—allowing investors who have recently bought shares to vote—was justified by the nearly 25% turnover in Dell shares since the deal was announced.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.