Billionaire investor Carl Icahn is in the midst of a bidding war against Dell CEO and founder Michael Dell with his private equity partner Silver Lake. Yesterday Michael Dell upped the ante by raising his bid by $0.10 per share. Icahn decided to write a rhyme (Dr. Seuss style) on Twitter to express his opinion on the upped bid:
This tweet was followed up with an open letter to Dell shareholders asking for Michael Dell to be ousted. Michael Dell’s latest offer valued Dell Inc. at $13.75 per share for a total of $24.6 billion.
This offer is contingent on a change to the rules in the buyout process that counts non-votes as equal to a “no” on the proposed buyout. Carl Icahn said that this provision is the “one thing protecting the interests of Dell stockholders.”
?? To change the rules at the last minute is outrageous,? said Icahn.
Below is the full letter that Icahn sent out as posted by AllThingsD:
Dear Fellow Dell Stockholders and Special Committee:
In today?s latest installment of the ?Desperate Dell Debacle,? Michael Dell/Silver Lake have asked the Company to change the rules of the game in a transparent attempt to force their freeze out transaction across the finish line despite the vote of its stockholders. In a Merger Agreement with widely-criticized protective devices in favor of Michael Dell/Silver Lake and a sales process that included a number of advantages for Michael Dell/Silver Lake, the one stockholder protection was the requirement that a majority of the non-Michael Dell shares approve the deal. The Special Committee has now been asked to GUT this provision to effectively render it meaningless. And, in return, Michael Dell/Silver Lake have offered to increase the deal price by $0.10, or 0.73%!
The Merger Agreement and the Proxy Statement established the rules. We and other stockholders have spent time and money understanding the rules created by Michael Dell, Silver Lake and Dell, and we have played by them. To change the rules at the last minute is outrageous. And, in this case, it appears the Special Committee may even agree with us, or at least they did back in February, when Dell, Michael Dell and Silver Lake ALL AGREED IN WRITING in the Merger Agreement that the required stockholder approvals ?shall not be waivable.? SHALL NOT BE WAIVABLE. Perhaps that means something else to Michael Dell/Silver Lake and the Special Committee, but to us, it means what it says ? You can?t get rid of this one provision that is designed to protect the interests of non-Michael Dell stockholders. Of course, this is precisely what Michael Dell and Silver Lake are today trying to do.
Michael Dell/Silver Lake this morning commented that the stockholder approval requirement is ?unfair?. Are they serious? They?re complaining about the fairness of the Merger Agreement that they and their lawyers negotiated and agreed to! How is it fair to change the rules at the end of the game, particularly when they and their teams of lawyers established the rules? If they are so concerned about fairness, then let?s discuss and actually make the Merger Agreement fair ? let?s get rid of the outrageous $450 million break up fee and change the definition of a Superior Proposal so it actually encourages competing bids. It?s outrageous to construct a merger agreement where a competing bidder does not get compensated with a break up fee if they are matched or topped. By not allowing this, it is virtually insurmountable to incentivize banks to finance a higher bidder.
We have spent the past 6 months explaining why we believe that not only does the Michael Dell/Silver Lake transaction undervalue the company, but it also freezes out loyal stockholders who deserve the opportunity to stay with Dell. How is that fair? In short, we have explained why we believe Michael Dell is doing a great disservice to his stockholders and has structured a deal that we believe is unfair. Today, Michael Dell and Silver Lake crossed the Rubicon by trying to take away the one provision in the Merger Agreement that actually provided stockholders with a voice in their company. It is time for Michael Dell and this Board to go. After more than a year since the last annual election, it is time to schedule the 2013 Annual Meeting and move forward.
A few days ago we warned this Board not to run the Company like a banana republic. Some commentators have even compared this ?Desperate Dell Debacle? to Vladimir Putin and North Korea! After this latest action by Michael Dell/Silver Lake, we are clearer than ever ? it is time for Michael Dell and this Board to go.