AFFILIATES OF CARL C. ICAHN FILE LAWSUIT AGAINST DELL TECHNOLOGIES INC.
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New York, New York, November 1, 2018 — Affiliates of Carl C. Icahn, which own 18.5 million shares, or 9.3%, of Dell Technologies Inc.’s (“Dell”) Class V Common Stock (NYSE: DVMT), have commenced litigation against Dell Technologies Inc. The complaint was filed in the Court of Chancery of the State of Delaware on October 31, 2018.
Q3 hedge fund letters, conference, scoops etc
- Icahn affiliates forced to file complaint against Dell because even though Delaware stockholders have the right to review a company’s books and records, Dell refused to provide much basic information relating to the proposed DVMT merger and solicitation.
- Dell completely refused to provide any information relating to the period from July 3, 2018 through the present. This period is critical to DVMT stockholders because the company and its advisors have been soliciting votes, and DVMT stockholders have a right to know whether, and to what extent, the Board is aware of, and even planned, some of the apparently coercive tactics being employed by the company and its advisors.
- The complaint demands that Dell permit Icahn to review and potentially share material information relating to the proposed DVMT Merger. DVMT stockholders deserve to know the full and objective truth! DVMT stockholders should not have to rely exclusively on a narrative provided by the company and its controlling stockholders.
- The proposed DVMT merger is a conflicted transaction that benefits the controlling stockholders, at the expense of the DVMT stockholders. It is imperative to understand on what grounds, if any, the independent directors concluded that the proposed DVMT Merger, a transaction that allows the controlling stockholders to capture a substantial majority of $11 billion, is in the best interests of the DVMT stockholders?
- The DVMT stockholders are OWED fiduciary duties by the Board. With the Court’s support, we believe Icahn’s litigation will uncover whether the Board properly discharged its fiduciary duties to the DVMT stockholders.
- For example, were the independent directors informed or did the controlling stockholders and Dell’s advisors taint the process by mischaracterizing the forced IPO conversion as an ultimatum? Did the independent directors and their advisors understand the forced IPO conversion is a threat designed to force the DVMT stockholders to support the DVMT merger? Or were they pressured into agreeing to the proposed DVMT merger in order to eliminate the risk of the forced IPO conversion?
- Were the independent directors freely able to select their own advisors? Or, were they “encouraged” to engage Evercore – a firm that has a history of providing advisory services in Dell transactions?
- By repeatedly and publicly invoking the possibility of an IPO, we believe Dell is brazenly suggesting that if the proposed DVMT merger fails, then the company will complete an IPO which all informed stockholders are aware can be followed by a forced conversion of the DVMT stock into shares of Dell’s newly listed stock. We believe this is a threat blatantly deployed in an attempt to coerce DVMT stockholders to vote in favor of the merger, or else risk the unknown consequences of the forced IPO conversion.
- DVMT stockholders have a right to know whether and to what extent these tactics have been discussed at the Board level and with management and the company’s advisors.
- If Dell’s process to takeout the Class V stock was conducted in a fair manner consistent with Delaware law requirements, if the Board discharged its fiduciary duties, then why not share all relevant books and records? Or, is there something to hide from Dell’s public stockholders?
- DVMT shares have consistently been used to capture value attributable to Michael Dell and his Silver Lake partners. At the beginning, the DVMT shares were financially engineered to bridge the valuation gap in the EMC acquisition when highly levered Dell could not raise any additional debt.
- For the past two years, DVMT shares traded at a massive discount. But, instead of fulfilling their fiduciary duties to DVMT stockholders and trying to close that massive discount, the Dell Board chose to engage in a complex share repurchase program designed to capture further value. Now, if allowed to proceed on its current terms, the proposed DVMT merger will capture a substantial amount of $11 billion in incremental value that will substantially benefit Michel Dell and Silver Lake. That cannot be an accident.
We believe we have compelling arguments and we are optimistic that the Delaware courts will support our efforts. The proposed Class V merger is a controlling stockholder transaction, and as such, Delaware law requires that minority stockholders be protected. To assess whether minority stockholders have been adequately protected, it is imperative that we are permitted to review the company’s relevant books and records. What is Dell hiding?
STOP THE PROPOSED DVMT MERGER!
VOTE AGAINST THE MERGER!
Article by Carl Icahn
