Billionaire investor Carl Icahn is warning that the latest offer from Dell's founder to buy the struggling computer maker bypasses an important shareholder safeguard.
Icahn and the investment firm Southeastern Asset Management said in a letter to a special committee of Dell Inc. board members that Michael Dell wants to circumvent the voting process behind the deal by preventing stockholders from passively dissenting on the offer.
Icahn and Southeastern are major Dell shareholders who have been leading a push to defeat Michael Dell's plan.
Last week, a group led by founder Michael Dell and the investment firm Silver Lake Partners raised their buyout offer for the Round Rock, Texas, company to $13.75 per share, up a dime from $13.65.
But they also want a change in the voting rules. They say the offer's fate must be decided by the shareholders who choose to vote either in favor of the plan or against it. Previously, non-voting shareholders were counted as opponents of the proposal.
Icahn and Southeastern said in an open letter to the board committee that they believe many Dell stockholders who oppose the deal may have not voted because they knew their inaction would count as a vote against the merger. They say the group led by Michael Dell is now essentially offering to pay a dime per share for a new voting method that prevents many stockholders from rejecting the deal.
"We trust that you will see this for what it is and recognize that proper protections for stockholders of Dell should not be offered for sale to anyone at any price," the letter stated, adding that the standard for approval that counts non-voting shares is perhaps the only safeguard for shareholders included in the deal.
A Dell spokesman declined to comment on the letter.
In a separate letter to Dell shareholders, Michael Dell and Silver Lake have said they believe the change is "fair and reasonable" to the company's other shareholders, especially given the new offer's additional 10 cents per share for the stakeholders.
Michael Dell and Silver Lake said last week that their new offer represents their "best and final proposal." It increases the total amount they are willing to pay shareholders by about $150 million, raising the value of the proposed deal to about $24.6 billion.
The vote on the offer has been delayed a couple times and is now scheduled for Friday.
Icahn and Southeastern have offered a more complicated alternative to Michael Dell's offer, but they first need to block that deal and then replace the company's board in a follow-up battle.
Michael Dell first offered to buyout his company earlier this year.
He says that he can turn around Dell by spending heavily to build better tablets while also diversifying into more profitable areas of technology, such as business software, data storage and consulting. Those changes likely will be tumultuous and temporarily lower Dell's earnings, an upheaval that Michael Dell contends will be more tolerable if the company no longer has to answer to other shareholders.
Dell shares fell 6 cents to $12.88 Monday before markets opened.