8 Mar 2013

Corporate raider enters Dell battle

8:14 am on 8 March 2013

US corporate raider Carl Icahn has a stake in Dell Computers and is against a private equity buyout deal.

In a letter made public by the company's board of directors on Thursday, Mr Icahn said the plan to take the company private in a $US24.4 billion buyout led by founder Michael Dell "is not in the best interests of Dell shareholders and substantially undervalues the company".

Mr Icahn is known for moves on companies ranging from MGM to Yahoo! He said Dell, instead of going private, should make a special dividend payment to shareholders by using cash, assets or by borrowing.

AAP reports this plan would give Dell shareholders 67% more than the offer of $US13.65 per share.

"We see no reason that the future value of Dell should not accrue to all existing Dell shareholders - not just Michael Dell," Mr Icahn said in the letter.

Mr Icahn said his investment firm had taken a "substantial" stake in Dell, without elaborating. CNBC Television reported the stake to be around 6%.

He said if Dell allows the buyout to move ahead, "we anticipate years of litigation will follow challenging the transaction and the actions of those directors that participated in it".

AAP reports it least two major institutional shareholders have also said they would vote against the plan.