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Icahn Sues Over Dell Voting

by Saabira Chaudhuri , courtesy Wall Street Journal –

Activist investor  Carl Icahn has filed a lawsuit against Dell Inc.  DELL +2.28% and its board to prevent the computer maker from further delaying a vote scheduled Friday or changing the voting rules for a proposed buyout by Dell’s founder.

CNBC

CNBC

Activist investor Carl Icahn files a lawsuit against Dell to prevent the computer maker from further delaying a vote for a proposed buyout by Dell’s founder. David Benoit has details.

In the complaint filed in Delaware Court of Chancery, Mr. Icahn said that if Dell is permitted to set a new date for a meeting to vote on whether the company should be taken private, the vote should be held at the same time as the annual meeting.

The suit seeks to prevent Dell from setting a new record date for shareholders eligible to vote. The record date is currently June 3, meaning shareholders as of that date can vote. The meeting is scheduled Friday morning, though it is unclear if shareholders will get to vote on the $24.4 billion buyout or if the vote will be postponed again.

Mr. Icahn is also looking to prevent founder  Michael Dell and his affiliates from voting any Dell shares acquired since Feb. 5 and to obtain a declaration that the board breached its fiduciary duties to stockholders by adjourning the July 24 special meeting without also scheduling an annual meeting at that time.

In a written statement, a company spokesman said: “The Dell Board of Directors has at all times sought to maximize value for, and acted in accordance with its fiduciary duties to, Dell stockholders and will continue to do so.”

The complaint seeks to stop the company from changing the stockholder voting requirements in the buyout agreement. Mr. Icahn is also seeking damages from Dell and its directors for any losses caused by the company or its board.

The move is one more salvo in what has become a protracted struggle between Mr. Icahn and the buyout group of Mr. Dell and private-equity firm Silver Lake.

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CNBCCarl Icahn, above, filed suit one day ahead of a scheduled vote Friday.

It comes after Dell’s special board committee rejected a request from Mr. Dell to change the voting rules on his buyout offer—which count abstentions as “No” votes—as Mr. Dell and Silver Lake requested last week. But the committee offered to change the record date governing which shareholders can vote in exchange for the buyout group’s 10-cents-a-share bump proposed in connection with the voting rules request.

A change in the record date would be designed to boost the number of shareholders likely to vote by including more-recent shareholders. The buyout group has in the past suggested changing the record date in conjunction with its request to change the voting rules. Some in the buyout group felt some shareholders who had sold shares in recent weeks hadn’t then bothered to vote ahead of the prior deadlines.

Since the computer maker announced a $13.65-a-share deal in early February, it has faced resistance from activist investors as well as typically more pliant shareholders.

Dell shares rose 2.3% to $12.96 in trading Thursday on the Nasdaq Stock Market.

Thank you, Tia

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