Delaware Chancery Court Judge Leo Strine Jr. yesterday denied the request by Icahn, who is trying to thwart a buyout by founder Michael Dell, at a hearing in Wilmington. Dell shareholders of record Aug. 13 are scheduled to vote on the $24.9 billion buyout at a special meeting Sept. 12 and to choose directors at an annual meeting Oct. 17.
Strine agreed with lawyers for the company who contended Icahn’s affiliates have had ample time to evaluate the fairness of the buyout and could have made a bid.
“This court is not going to be dragged into a tactical game” over the contention between Icahn and Dell, Strine said.
He also confirmed the annual meeting date.
Dell, 48, and Silver Lake Management LLC had offered $13.65 a share for the PC maker, then sweetened the bid, agreeing to pay $13.75 a share and a special dividend of 13 cents a share, on top of a regular 8 cents a share dividend -- bringing the total investors would get in the going-private transaction to $13.96 a share.
The stock rose 11 cents to $13.82 in Nasdaq stock market trading yesterday in New York.
Icahn, 77, opposes the deal in favor of a recapitalization plan that would keep the stock in public hands. He sued the board Aug. 1 for violating duties under Delaware corporate law, failing to get the best deal, and wrongly separating the special shareholders’ meeting and the annual meeting -- allegedly tilting the odds toward the company.
As he took the bench, Strine stated an opinion that made clear his feelings on Icahn’s contentions, and lawyers for both sides weren’t given a chance to speak.
The judge said he saw no evidence of “coercion” or “irreparable harm” if the case runs its normal course and “no colorable basis” for expediting proceedings.
Strine also noted that Icahn promised “a nifty cool chief executive officer” if his slate of candidates prevails at the annual meeting yet “he hasn’t said who that CEO is.”
Michael Dell holds more than 15 percent of company common shares, and Icahn holds about 9 percent, according to data compiled by Bloomberg.
Round Rock, Texas-based Dell’s board has “sought to maximize value for, and acted in accordance with its fiduciary duties to, Dell stockholders and will continue to do so,” David Frink, a company spokesman, said in a statement prior to the hearing.
“As a result of today’s court ruling, we remain on course for a Sept. 12 shareholder vote on the pending buyout transaction,” Frink said yesterday in a statement.
Icahn wasn’t immediately available to comment on the ruling.
Icahn, whose Icahn Enterprises LP (IEP) is based in New York, was denied his request to accelerate claims that board members violated their duties to shareholders in separating the deal-vote date and the annual meeting date.
The Dell board “acted in good faith,” Strine said.
Shareholders have already sued Dell officials in federal court in Houston, and at least 20 other Delaware Chancery suits are pending.
In one Chancery case, lawyers for pension funds holding Dell stock contend the board rigged the election and should be barred from allowing abstentions to be counted as “no” votes.
The case is High River v. Dell Inc. (DELL), CA8762, Delaware Chancery Court (Wilmington).
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