Carl Icahn says he’s filing a lawsuit against Dell Inc. (NASDAQ:DELL) over a number of issues. It’s only his latest last ditch attempt (yes, most people only get one) to prevent the go-private leveraged buyout offer from going through.
Dell wants to change the record date
This week Dell Inc. (NASDAQ:DELL)’s special committee suggested that the record date for the vote on that buyout offer could be changed. The committee wanted to do that instead of allowing founder Michael Dell and Silver Lake to change the voting rules. Mr. Dell and Silver Lake raised their offer for the company on the contingency that the voting rules be changed.
Jillian Ward of Bloomberg reports that Icahn’s lawsuit aims to block Dell’s attempt to change the record date, which is the date by when shareholders must have held their shares in order to be allowed to vote on the buyout offer. Icahn also wants to keep Mr. Dell and his affiliates from being able to cast votes for any shares that were acquired since Feb. 5, which was when the offer was announced. In addition, he wants to prevent Michael from changing the voting rules and receive a declaration that Dell’s board has breached its fiduciary duties.
And if all of that wasn’t enough, he also wants damages for any losses he incurs.
Why Michael Dell wants the voting rules changed
Mr. Dell’s original offer to take the company private was worth $13.65 per share. Since then, Icahn has been offering an alternative that would keep the company public, and he’s been doing everything he can to prevent Mr. Dell from prevailing.
In July the company founder finally caved to Icahn’s push for a higher price, so he raised his offer to $13.75 per share—but only if the voting rules could be changed so that it would be easier for the buyout offer to pass. Currently shareholders who abstain from voting have their votes counted as no votes. Mr. Dell wants to make the rules so that only the votes which are cast actually count toward the total.
At this point Dell Inc. (NASDAQ:DELL)’s special committee plans to move forward with a shareholder vote on Mr. Dell’s original $13.65 per share offer tomorrow as planned, leaving the voting rules and record date as they were. That vote has already been delayed a couple of times since the original date on July 18.