For months now, it has been one of the most high-profile battles on Wall Street: Carl Icahn, the activist investor, leading the opposition to Michael Dell’s plan to take the computer giant he founded private as it struggles to deal with the drop-off in PC sales. But yesterday Mr Icahn finally threw in the towel after a series of defeats.
In a letter to fellow Dell shareholders, Mr Icahn said that the setbacks, including, importantly, a change in the voting rules that is expected to make it easier for Mr Dell and his private-equity partners at Silver Lake to win shareholder backing for the proposal, meant he was finally stepping back.
“I realise that some stockholders will be disappointed that we do not fight on,” he wrote. “However, over the last decade, mainly through ‘activism’ we have enhanced stockholder value in many companies by billions of dollars. We did not accomplish this by waging battles that we thought we would lose.”
He added: “While we of course are saddened at our losing the battle to control Dell, it certainly makes the loss a lot more tolerable in that as a result of our involvement, Michael Dell/Silver Lake increased what they said was their ‘best and final offer’.
“As a result of this increase, all stockholders are to receive many hundreds of millions of dollars more than the board originally accepted.”
While saying that he intended to call Mr Dell to wish him luck, Mr Icahn could not resist the opportunity to take a shot at the Dell board: “The Dell board, like so many boards in this country, reminds me of Clark Gable’s last words in Gone with the Wind. they simply ‘don’t give a damn’.”
Mr Icahn had argued that Mr Dell’s plans to take the business private in a $25bn (£16bn) deal undervalued Dell, opposing the transaction along with major investor Southeastern Asset Management.
Owing to their campaign, the shareholder vote on the deal has already been delayed twice. It is now meant to take place later this week following rule changes that are expected to hand Mr Dell a victory.
In his letter, Mr Icahn said: “We jokingly ask, ‘What’s the difference between Dell and a dictatorship?’ The answer: most functioning dictatorships only need to postpone the vote once to win.”
The activist investor, who in the past has targeted Yahoo and Time Warner, added that while he was backing down from the fight with Mr Dell, he would continue to keep tabs on the situation.
“If you are incensed by the actions of the Dell board as much as I am, I hope you will choose to follow me on Twitter, where from time to time I give my investment insights,” Mr Icahn said.