Published On: Sat, Oct 5th, 2013

Icahn Brings Formal Closure To His Dell Adventure By Withdrawing Appraisal Demand

Carl Icahn getty

Carl Icahn/ Getty

In practical terms Carl Icahn threw in the towel some weeks ago in his fight against the Michael Dell and Silver Lake Partners buy-out of Dell Inc, which was subsequently approved by shareholders in a vote on September 12th, 2013. He even offered a back-handed compliment to Michael Dell along the way for out-manoeuvring him.

However from a formal point of view one of his earlier procedural steps still remained outstanding, namely his request before a Delaware Court to request an appraisal of his shares instead of the bid price. Under Delaware law shareholders who do not vote in a merger proposal have the right to request a formal appraisal of the value of their holding – a process that can take many months and which can offer no guarantee of a result higher than the bid price. Indeed in such event it could easily be lower.

Accordingly he has now delivered the coup de grace on his own opposition to the bid. Yesterday he tweeted on his now-famous Twitter account as follows: “I withdrew my demand for appraisal of my Dell shares. Based on our returns on capital, we believe we have better uses for $2 billion.”

And two days earlier Dell Inc. had filed the same information in an 8-K Current Report with the Securities and Exchange Commission as follows:

“On October 2, 2013, affiliates of Carl Icahn notified Dell Inc. that, as of such date, those entities have withdrawn their written demands for appraisal for all 156, 478, 650 shares of Dell common stock submitted pursuant to Section 262 of the Delaware General Corporation Law in connection with Dell’s pending going-private merger transaction approved by Dell’s stockholders on September 12, 2013.”

It seems Mr. Icahn now has better things to do in his, probably elusive, pursuit of a proposed US$150 billion, debt-funded, market share repurchase program he has put forward to Apple Inc. His proposal is unlikely to make much of an impact with Apple though, as it would certainly tend to adversely affect Apple’s own credit standing if it were implemented. Bond markets obviously have concluded the proposal may be going nowhere too, as their pricing of Apple’s existing bonds that were issued earlier this year have barely budged.

 

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