Activist investor Carl Icahn has announced that he and his partner Southeastern Asset Management are giving up the fight to stop Michael Dell from taking the PC maker private.
Icahn said in an open letter to shareholders that he still thought that Big Mike's $13.88 per share offer for the firm undervalued it, but had decided that it would be "almost impossible" to win the battle at the shareholder vote on Thursday.
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"I realize that some stockholders will be disappointed that we do not fight on," he wrote. "However, over the last decade, mainly through 'activism', we have enhanced stockholder value in many companies by billions of dollars. We did not accomplish this by waging battles that we thought we would lose.
"Michael Dell/Silver Lake waged a hard fought battle and according to Chancellor Strine, the actions by Dell were within the Delaware law. We therefore congratulate Michael Dell and I intend to call him to wish him good luck (he may need it)," he added.
Chancellor Leo Strine, a judge in the Chancery Court, ruled that leaving a gap between the shareholder vote on the deal to take the firm private and the long-delayed annual general meeting was legal. Icahn had been pushing for the AGM to take place first in the hopes that he could replace some of the board members that had recommended going for Michael Dell's offer.
Icahn said that the ruling, along with the change in record date allowing new stockholders to vote on the offer and the raise in Dell's bid had scuppered his chances of foiling the bid.
He added that he still opposed the offer, but was pleased that his attempts to thwart it had at least forced Dell and his partners Silver Lake to up their price.
"It certainly makes the loss a lot more tolerable in that as a result of our involvement, Michael Dell/Silver Lake increased what they said was their 'best and final offer'," he said.
"As a result of this increase all stockholders are to receive many hundreds of millions of dollars more than the board originally accepted. We will never know how much more stockholders might have received if the board had allowed the annual meeting to proceed at the same time as the rescheduled special meeting which we believe would have put pressure on Michael Dell/Silver Lake to increase their bid."
Despite his magnanimous attitude towards Big Mike, Icahn is clearly still pretty miffed at the Dell board. He once more called out the directors for treating the vote "as totalitarian dictatorships do; where if they lose, they simply ignore the results" – referring to the numerous times the board delayed the vote, which according to Icahn was because they didn't believe it would go the way they wanted. ®