Carl Icahn Threatens "Years of Litigation" if Dell Doesn't Raise Dividend

It's tough to say what kind of resistance Michael Dell anticipated when decided to acquire the company he founded for $24.4 billion. Under terms of the deal, which was unanimously approved by Dell's Board of Directors, Mr. Dell and his investment partners will pay shareholders $13.65 per share in cash. That figure represents a 25 percent premium over Dell's closing share price of $10.88 on January 11, 2013, the last trading day before rumors surrounding the deal were first published, but not everyone is happy with the figure.

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.