Icahn: Get your Dell shares appraised
- Icahn urges stockholders to get shares appraised to force Michael Dell to increase offer
- Appraisal might force Dell/Silver Lake to pay premium to get shareholders to settle
- Shareholders will vote on the Dell offer to take the company private on July 18
Activist investor Carl Icahn urged fellow Dell stockholders to seek an appraisal of their shares in his latest efforts to defeat the company founder's $13.65 a share offer to take the PC maker private.
In an open letter to shareholders Wednesday, Dell's second-largest shareholder reminded investors why he thinks Michael Dell's offer is not as generous or the smartest move strategically for the Round Rock-Tex.-based company.
The offer from CEO Michael Dell, who owns 16% of his company's shares, and investing firm Silver Lake Partners "substantially undervalues your Dell shares," Icahn wrote. "If you seek appraisal, you will receive more."
Icahn, who owns 8.7% of the company, also said Wednesday that he plans to ask a court in Delaware, where many companies are incorporated because of the state's corporate-friendly tax laws, to assess whether the founder's proposed $24.4 billion acquisition of Dell represents a fair price.
His latest efforts follow an opinion earlier this week approving the Dell offer by corporate governance advisory firm Institutional Shareholders Services. A shareholder vote on the Michael Dell bid is scheduled for July 18 and requires a simple majority for approval.
Icahn's letter told his fellow shareholders that Michael Dell's offer does not include the right to opt out of the deal if a certain number of shareholders seek appraisal rights.
"WHAT IS MOST IMPORTANT ABOUT SEEKING APPRAISAL IS THAT YOU CAN CHANGE YOUR MIND ABOUT APPRAISAL UP TO 60 DAYS AFTER THE MERGER," Icahn wrote in his open letter, telling shareholders Michael Dell might negotiate with those seeking appraisal and possibly pay a premium to get them to settle.
"You can have your cake and eat it, too," Icahn added.
Icahn and investing firm Southeastern Asset Management have proposed a stock buyback as an alternative to the CEO's plan. Icahn wants stockholders to tender 1.1 billion shares at $14 each.
It would keep about 40% of the company publicly traded and would be financed by adding significantly to the company's debt. On Tuesday, Dell shareholder Yacktman Asset Management, which holds 14.8 million Dell shares, threw its support behind the Icahn offer.
On Tuesday, Dell stock was up less than 0.1% to $13.37 a share.
Contributing: The Associated Press