Icahn Suing Dell to Prevent Changes to Vote Terms

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Aug. 1 (Bloomberg) -- Carl Icahn, the billionaire investor who has been working to scuttle a $24.4 billion leveraged buyout of computer maker Dell, said he is filing a complaint that seeks to stop the company from changing the record date for voting on the deal. Cristina Alesci reports on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

We have breaking news -- one day before dell shareholders are set to meet and possibly take a vote on the dell buy out, we are getting news that carl icahn is planning to sue the company and the adult board.

Icahn is trying to stop all from changing the record date.

We go to new york with the latest.

What does this latest twist mean?

Carl icahn said he was prepared to litigate and here he is fulfilling that promise.

As you know, we have been waiting to hear back from michael dell and silver light.

The special committee came back with a counterproposal yesterday saying that willing to change the record date so long as silver lake and michael dell kept the $13.75 offer.

Carl icahn is saying that the board is breaching its duty because it keeps delaying a the votem, trying to steer the deal to michael dell and silver lake and he thinks the process has been conflicted from the beginning.

He is going to sue as a result.

The theory is that if you move the record date, you allow more shareholders to vote that got into the stock thinking the deal would get done at $13.65. carl icahn wants the vote to happen tomorrow because he knows that the deal will likely fail at the record date does not change.

Why is that?

This is what has played to this deal from the beginning.

It is the way that michael dell and silver lake negotiated the merger agreement.

In the merger agreement, it required a majority of all shareholders of the pool all shareholders to vote in favor of the deal.

Under that contract, people who abstain from butting count against michael dell and silver lake.

What they wanted to do was to basically have abstentions not counted all, not have that work against them, and they could not get the special committee to agree to that because the special committee realized they would be taking on a severe litigation risk by doing that.

Again, this was a shareholder protection.

This was supposed to be something the special committee negotiated to protect shareholders and make sure this process was as fair as possible.

I feel like i have been asking you this every week -- this date continue to get pushed back.

In your estimation, what is the likelihood this will happen tomorrow?

Was the likelihood that this deal goes through?

The sources that i have been speaking to told me that there is the potential that michael dell and silver lake and the special committee will come to some kind of agreement.

That would have resulted in the vote getting postponed again.

As part of the agreement, you have to change the record date and if you do, you have to change the shareholder vote and give them some time to consider this new deal.

What we were planning on happening tomorrow or what we thought would be a likely outcome, is another postponement.

Delaware judges don't like it when companies postponed a shareholder votes because they see it as a manipulation of the outcome of research in the event.

That is the scrutiny that will be around this deal and that is what carl icahn is capitalizing on.

He is saying that there will be more shareholder lawsuits and this is the first one.

This process was not run correctly are fairly for shareholders and i am suing.

I'm sure this story will be developing by the minute and we will be watching it.

Cristina alesci in new york.

This text has been automatically generated. It may not be 100% accurate.


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