Icahn Ends Takeover Battle for Dell

After months of bitter fighting over the future of computer maker Dell Inc., Carl Icahn said in a sharply worded letter Monday that he was giving up.

That appears to clear the way for CEO Michael Dell to take the company he founded private during a shareholder vote set for Thursday.

But Icahn didn’t go quietly. He directed some final jabs at Michael Dell, reiterating that he still thought the founder’s buyout offer was too low, and compared the company’s board – which postponed the shareholder vote numerous times and changed the voting rules to better Michael Dell’s takeover chances – to a dictatorship. He noted that “some stockholders will be disappointed that we do not fight on.”

Icahn’s departure, plus a recent change to Dell Inc.’s shareholder voting rules, should solidify Michael Dell’s victory during Thursday’s vote at the company’s Round Rock, Texas, headquarters.

Before the vote change, shares not cast counted as “no” votes; now, the outcome of the vote depends solely on actual votes cast. Dell Inc. also pushed back the date of record for stockholders entitled to vote.

Those last-minute maneuvers angered Icahn.

“We won, or at least thought we won, but when the board realized that they lost the vote, they simply ignored the outcome. Even in a dictatorship when the ruling party loses an election, and then ignores its outcome, it attempts to provide a plausible reason to justify their actions,” 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.”

Still, Icahn said, he wished Michael Dell and his company well – sort of.

“We therefore congratulate Michael Dell and I intend to call him to wish him good luck (he may need it),” he said.

Michael Dell is hoping the going-private move will help the struggling computer maker re-invent itself away from the glare and pressures of Wall Street.

Under Michael Dell’s revised proposal, announced in July, he and investment firm Silver Lake would acquire the PC maker for $13.75 per share in cash, up from the group’s previous offer of $13.65 per share. That bumps the value of the bid from $24.4 billion to $24.6 billion.

In Icahn’s most recent bid, Dell Inc. shareholders would have received $14 a share and a warrant for every four shares that they tender. The warrants could be used to purchase Dell shares for $20 in the future.

The billionaire activist investor also used the letter to plug his Twitter account:

“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.”

Icahn still has other fish to fry, though. He has recently been pressuring Apple Inc., saying the company’s stock is undervalued.