Carl Icahn Threatens "Years of Litigation" if Dell Doesn't Raise Dividend
Days after the deal was announced, Southeastern Asset Management wrote a letter to the board stating Dell's value is closer to $24 per share. Based on that belief, it deemed the current proposal an "ill-advised transaction" and asked the board to shop around for other bids, of which Dell has a 45-day window to do so. If a better bid isn't made, Southeastern Asset Management said it's ready to wage a war through a proxy fight and lawsuits.
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Investor Carl Icahn is also displeased with the $13.65/share payout. According to Reuters, Icahn wants Dell to pay out $15.7 billion in special dividends.
"We see no reason that the future value of Dell should not accrue to ALL the existing Dell shareholders -- not just Michael Dell," Icahn wrote in a letter to the company's board.
Like Southeastern Asset Management, Icahn brought up the possibility of a proxy fight, stating that "years of litigation will follow challenging the transaction and all the actions of the directors that participated in it." To help make it happen, Icahn offered a $3.25 billion bridge loan to Dell.
Dell is currently trading for around $14.34 per share.