Will Carl Icahn spoil Dell and Microsoft's leveraged buyout?

Michael Dell may have to deal with a new shareholder in Carl Icahn

Taking a huge publicly traded company, such as PC maker Dell, back to its origins as a  private corporation is a huge effort and now there's word that those plans may be getting more complicated. Billionaire Carl Icahn is rumored to be buying a six percent share of Dell and if that happens, his next move may be to organize an effort to stop Dell from going private.

Dell first announced its plans to launch a leverage buyout in February, with some help from Microsoft via a $2 billion investment in exchange for a portion of Dell. Now, CNBC reports that Icahn has bought up to 100 million shares in the PC company. So far, Icahn has not commented on these reports.

Icahn is no stranger to these kinds of tactics; he has made a number of attempts to buy large portions of publicly traded companies in order to influence their stock price or in an attempt to take them over. Some of these efforts have succeeded while others have not. Most recently, Icahn tried and failed to take over Lionsgate Pictures.

Some large shareholders have already announced their opposition to the leverage buyout plan for Dell, including Southeastern Asset Management, which owns about 8.5 percent of the company.

Source: CNBC | Image via Forbes

Report a problem with article
Previous Story

Next Issue Windows 8 app released; read lots of magazines for one monthly fee

Next Story

comScore: Microsoft's US smartphone OS share stagnant

12 Comments

Commenting is disabled on this article.

I hate it when rich people try to get even richer. You are a billionaire and you want more? Pathetic. Should be a $5 million cap on personal individual wealth. Disagree if you want.

rippleman said,
I hate it when rich people try to get even richer. You are a billionaire and you want more? Pathetic. Should be a $5 million cap on personal individual wealth. Disagree if you want.

Did you make your $5 million? If not... come back when you will....

I see...so If someone hits the 5 mil. cap the he should close his company and kick out all 1000+ employees, otherwise he would risk jail time for making more money )

rippleman said,
Elaborate please.

Quite simple: what are the parameters that make you think that the specific amount you mentioned should be the cap? Is it because, owning that amount you feel comfortable with? If not what?
My personal opinion is that life is continuous challenge and we push to succeed it. Some people could set a goal and, once reached it, be satisfied, others will look for higher ones.
Your utopia about an "Arcadia" with capped goals is just that: an utopia that does not fit, in general terms, with the human race.

I don't know how this works. If Dell buys back 94% of all stocks does it really matter if some guy owns the remaining 6%?

By himself, he doesn't have much power. But if he teams up with other large holders of Dell stock, then something might happen.

NeoNut said,
I don't know how this works. If Dell buys back 94% of all stocks does it really matter if some guy owns the remaining 6%?

No, a minority shareholder cannot prevent a buyout by himself. In fact, he cannot even own 6%. In a go-private transaction, he will be forcibly cashed out of his shares.

He's doing this to get himself a seat at the table, and to threaten to make trouble. It will be up to Michael Dell to decide whether he's bluffing.