Investor ends battle over Dell


After months of bitter fighting over the future of computer maker Dell Inc., Carl Icahn said in a sharply worded letter Monday that he was giving up.


That appears to clear the way for Chief Executive Michael Dell to take the company he founded private during a shareholder vote set for Thursday.

But Icahn didn’t go quietly. He directed some final jabs at Michael Dell, reiterating that he still thought the founder’s buyout offer was too low, and compared the company’s board – which postponed the shareholder vote numerous times and changed the voting rules to better Michael Dell’s takeover chances – to a dictatorship. He noted that “some stockholders will be disappointed that we do not fight on.”

Icahn’s departure plus a recent change to Dell Inc.’s shareholder voting rules should solidify Michael Dell’s victory during Thursday’s vote at the company’s Round Rock, Texas, headquarters.

Before the vote change, shares not cast counted as “no” votes; now the outcome of the vote depends solely on actual votes cast. Dell Inc. also pushed back the date of record for stockholders entitled to vote. Those last-minute maneuvers angered Icahn.

“We won, or at least thought we won, but when the board realized that they lost the vote, they simply ignored the outcome. Even in a dictatorship when the ruling party loses an election, and then ignores its outcome, it attempts to provide a plausible reason to justify their actions,” Icahn said. “We jokingly ask, ‘What’s the difference between Dell and a dictatorship?’ The answer: Most functioning dictatorships only need to postpone the vote once to win.”

Still, he wished Mich­ael Dell and his company well – sort of.

“We therefore congratulate Michael Dell and I intend to call him to wish him good luck (he may need it),” he said.

Michael Dell is hoping the going-private move will help the struggling computer maker re-invent itself away from the glare and pressures of Wall Street.

Under Michael Dell’s revised proposal, announced in July, he and investment firm Silver Lake would acquire the PC maker for $13.75 per share in cash, up from the group’s previous offer of $13.65 per share. That bumps the value of the bid to $24.6 billion, up from $24.4 billion.

In Icahn’s most recent bid, Dell Inc. shareholders would have received $14 a share and a warrant for every four shares that they tender. The warrants could be used to purchase Dell shares for $20 in the future.

The billionaire activist investor also made a movie reference in his letter:

“The Dell board, like so many boards in this country, reminds me of Clark Gable’s last words in Gone with the Wind, they simply ‘don’t give a damn,’ ” Icahn wrote.