Carl Icahn Sues Dell Over Plan To Go Public

Dell Technologies got slapped with a lawsuit by activist investor Carl Icahn Thursday (Nov. 1) over what the investor contends is a lack of proper disclosure of financial information on the part of Dell.

According to a report in Reuters, citing the lawsuit, Icahn argues Dell didn’t disclose financial information pertaining to its plan to go public by buying back its tracking stock. Icahn, who owns 9.3 percent of Dell, said the proposed deal is a “conflicted transaction that benefits the controlling stockholders, at the expense of the DVMT stockholders.”

Back in July, Dell announced it would pay $21.7 billion in cash and stock to repurchase shares tied to its stake in VMWare, enabling it to become a publicly traded company again without launching an initial public offering (IPO). Icahn and other hedge funds are against the plan, arguing it undervalues the tracking stock by a massive amount, noted the report.

“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,” Icahn said on Thursday (Nov. 1), according to Reuters. In October, he said he planned on voting against the plan and that he would look to get other shareholders to do the same thing.

This wouldn’t be the first time in 2018 that Icahn has lodged a lawsuit against a company. Earlier this year, he sued AmTrust Financial Services over the company’s plans to go private. Icahn, with the backing of investor Darwin Deason, called on Xerox shareholders earlier in 2018 to oppose a sale of the copying icon to Fujifilm Holdings of Japan. Icahn has also had issues with Dell in the past, contending Michael Dell, founder of Dell and Silver Lake, undervalued the company when it went private a few years back. Dell declined to comment to Reuters on the lawsuit.