Investors led by well-known activist Carl Icahn, who rejected a 2013 buyout of Dell, are set to be awarded funds by a US court that was asked to make a judgement on a fair value.
London, England, July 20, 2016 — The company’s founder Michaels Dell together with Silver Lake Partners, a private equity and investment firm, purchased remaining shares for a total of $24.8 billion a few years ago. The reason given for the buyout was to allow the company to better serve their customers.
Many investors slammed the agreement as being under-priced, however, and the ruling is a major victory with over five million shares being affected.
The buyers had originally valued the company shares at more than half the shareholders valuation leading to a chorus of disgruntled voices arguing Mr Dell and Silver Lake were taking advantage of a drop in Dell’s share price.
The court eventually decided the shares should have been priced around halfway between both sides’ valuations, although the judge added a disclaimer that the buyers had not intentionally priced their offer too cheaply.
Richard Sharpe, Co-Head of Global Mergers & Acquisitions at Acom Tokyo Securities commented on the ruling in a note to clients this morning, “The original deal back in 2013 was pretty contentious right from the off. Mr Icahn had strenuously opposed the buyout and gathered quite a strong shareholder force behind him. The ruling is a big win for their three year fight.”
Carl Icahn, who owns Icahn Enterprises, a diversified conglomerate holding company based in New York City, could not stop the deal going through but promised unhappy shareholders he would seek appraisal rights moving forward.
He said back in 2013, “We feel it would be fruitless to pursue a block to the agreement, although we will most definitely be looking to obtain some kind of justice through the court system for the pricing of our shares, this is not over.”
Acom Tokyo Securities Ltd