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Carl Icahn is preparing for another battle with Michael Dell.
The activist investor, who fought against Mr. Dell when he privatized his computer company of the same name in 2013, will challenge his intention to make it public again.
Mr Icahn revealed on Monday that he had increased his participation in actions that follow
Dell Technologies
Inc.
DVMT 3.01%
interest in
VMware
Inc.
VMW 4.42%
at 8.3%. In a letter, he announced that he was considering voting against Dell Technologies' plan to buy the stock, known as its stock symbol, DVMT, and to encourage other shareholders to do the same.
This decision represents a serious challenge for an agreement to streamline Dell's complex ownership structure and bring the company back into public markets. Several other investors are already unhappy with the proposal, which Dell and investment firm Silver Lake announced in July, and Icahn's public opposition increases the chances of gaining shareholder approval.
Mr. Icahn argues that the current transaction, which would allow the holders of the followed shares to exchange each share for 1.3665 shares of what will become a newly public Dell, or $ 109 in cash, significantly underestimates the shares. DVMT.
"I am firmly convinced that Dell and Silver Lake are trying to recover $ 11 billion in value that rightly belongs to us," he said in an open letter to other shareholders. Mr Icahn said that he thought the DVMT was worth about 144 dollars a share, based on recent stock prices of DVMT and VMware shares. It is currently trading at around $ 94.50.
Dell's special board of directors, representing the shareholders of DVMT, has previously indicated that it has reviewed several alternatives and determined that the current offer maximizes value.
The deal has been unpopular with shareholders since its announcement. Holders of approximately 20% of the WTDs – including Mr. Icahn, another activist, Elliott Management Corp., some
Black rock
Inc.
and others – were already planning to reject it, had already reported the Wall Street Journal.
While Mr. Icahn did not initially intend to challenge the agreement, his plans changed as more and more investors expressed their concerns, but no other major shareholder came forward. and he did more research, according to people close to the file.
It has recently strengthened its position by 1.2%.
P. Schoenfeld Asset Management LP, which has a much smaller stake in DVMT, said in a letter made public on October 5 that the consideration should be increased by 20%. Mr. Icahn would be unlikely to support an agreement, even at this price, said the people.
Mr. Icahn also indicated in his letter that he was considering making a competing partial offer for the purchase of DVMT shares, in the event that certain holders would like to withdraw money at a lower price than he would deem fair. .
Dell, which met with investors to sell the deal, said its bid was final. While shareholder dissatisfaction prevailed, Dell polled several banks about the possibility of an initial public offering for savings, which she viewed as a backup option if the transaction in course was failing, the newspaper reported last month. But Mr. Icahn and other shareholders of DVMT considered it an empty threat.
Formerly the largest manufacturer of personal computers, Dell is now recognized for its enterprise products such as storage, servers and security software. His majority stake in VMware is considered his most promising asset.
DVMT was created to help finance Dell's 2016 purchase of the EMC storage pioneer. Dell was privatized through a debt buyback of approximately $ 25 billion in 2013 by Dell and Silver Lake.
During the months-long clashes between Mr. Icahn and Dell, the buyout group eventually raised the price slightly and added a dividend, forcing Mr. Icahn to yield.
In his letter of Monday, Mr. Icahn said he did not expect a quick resolution. "I intend to do everything in my power to put an end to this proposed merger between DVMT," he wrote.
Write to Cara Lombardo at [email protected]
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