Billionaire investor Carl Icahn’s bid to speed up proceedings in a lawsuit against computer maker Dell Inc. was rejected by a judge in Delaware.
Delaware Chancery Court Judge Leo Strine Jr. today 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 and haven’t.
“This court is not going to be dragged into a tactical game” over the contention between Icahn and Dell, Strine said.
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.
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 towards the company.
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,” said David Frink, a company spokesman, in a prepared statement.
Icahn, whose Icahn Enterprises LP 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., CA8762, Delaware Chancery Court (Wilmington).
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