It seemed bad enough to me that Michael Dell was going to get in bed with private equity sharks (and Microsoft) and try to take his company private, which is why I wrote « Michael Dell Goes To Hell » a few weeks ago.
Now things have taken a turn for the worse, as devil incarnate Carl Icahn has jumped into the deal, vowing to block it because he says it’s not fair to Dell shareholders.
Dell proposes to buy out shareholders at $13.65 a share, but Icahn says this « significantly undervalues » the company. And he promises to bring « years of litigation » against Dell if the deal goes through.
Translation: Pay me and I’ll go away.
To get some perspective on Icahn, read this New York Times story from 2011 where hedge fund manager Bill Ackman says of Icahn, « The guy is a shakedown artist. His word is worthless. »
Icahn was the real-life inspiration for the character of Gordon Gekko. In 2008 he decided to torment Yahoo, and managed to get a seat on its board but never accomplished much except being a royal pain in the ass before stepping down in 2009.
Now poor old Michael Dell has to deal with this guy. Apparently Icahn could manage to scuttle the deal.
As bad as things were a month ago, they’re even worse now.
(See also Michael Dell Goes To Hell.)
And whatever happens with the buyout, Dell still needs to find a solution to its central problem, which has nothing to do with whether or not the company is publicly traded and everything to do with the fact that Dell has become a big, boring company that hasn’t made an exciting product in more than a decade.