Icahn Loses Case to Stop Dell Buyout Rule Changes - The UpStream

Michael Dell's plans to take the company that holds his name private has not gone his way. First, after announcing his plans, customers grew concerned that a wrong move could end the company. Enterprises that have relied on Dell's low-end hardware to run mission critical applications were forced to consider other alternatives. In addition, certain investors, most vocally Carl Icahn, objected to the plan, suggesting it was not in the stockholders' best interests.

Mr. Icahn made a lot of noise about his objections, getting enough support to concern Michael Dell and the board of directors. Then, in counter, Dell increased his offer, but required a change to the voting rules. As they stand, the rules state that unvoted shares would be counted as a "no" vote.

With the expectation that as many as 25% of all shareholders would not respond, that would allow a vocal minority of shareholders to block the plan. The change requirement would scrap unvoted shares, only counting those that are legitimately returned. Icahn filed a suit against the board, trying to prevent them from allowing the voting rules to change. Obviously he was counting on this loophole to get his way.

Unfortunately for Icahn, a judge this week denied his request to expedite the suit. This means that the hearing will take place after the vote and there is nothing legally that he can do about it. His only option at this point, as the judge points out, is to outbid Dell and Silver Lake Partners.