No stranger to lawsuits, activist investor Carl Icahn has taken the legal route to stop Dell from going ahead with its IPO saying the deal does not value DVMT stockholders.
In a strategic development, activist investor Carl Icahn has sued Dell Technologies in an effort aimed at stopping the tech giant from going ahead with its IPO plans. In the lawsuit, Icahn has alleged that Dell did not disclosed financial information related to its plans to go public by buying back its tracking stock.
Icahn, who has a stake of 9.3% in Dell, has termed Dell’s IPO plans as a “conflicted transaction that benefits the controlling stockholders, at the expense of the DVMT stockholders”.
In July, Dell had said, it would pay $21.7 billion in cash and stock to buy back shares tied to its interest in software company VMware Inc and return to being a public company without an initial public offering.
Icahn along with other hedge fund investors have said the plan massively undervalues the tracking stock and have resisted it since.
“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,” said Icahn.
Dell is scheduled to hold a shareholder’s meeting on December 11 to vote on this proposed deal.
Dell’s spokesman said Icahn’s allegations were “unfounded” while adding that Dell would file a response later in the day.
Carl Icahn did not immediately respond to request for comment.