Now Dell Inc (NASDAQ:DELL) directors under direct fire from investors
Dell Inc (NASDAQ:DELL)’s directors had bent the voting rules to make the scenario more conducive for Michael Dell’s $24.9B buyout bid. In a way this has smudged the deal and the company’s investors are now challenging the offer in different court filings. Six pension funds have sued over the deal. These lawsuits have been filed in the Delaware Chancery Court. According to the filing, the litigants are saying that the company board should ideally be barred from permitting absentee votes to be counted in as “no votes”.
They had also pushed back the date three times to accommodate Michael Dell’s request for the same. It must be mentioned here that Dell had sweetened the buyout offer two times since the time he first put forth his bid. Michael Dell and Silver Lake Management are offering $13.75/share + a 13 cent dividend to take the company private.
A fiduciary duty?
In an amended complaint, the funds are saying that Dell’s directors cannot utilize corporate machinery to rig the election process. Last week, the company board decided to accept Michael Dell’s offer. They were also more than willing to bend the rules to suit his ends. Eventually, this move worked in his favor. The company is saying that they acted in line with their fiduciary duties as far as their decision to back the founder was concerned. The company’s stand is that the one standing motive of the board is to maximize value for the company’s stockholders.
Carl Icahn, the billionaire who also has a large stake in Dell has sued separately and he had also requested the court that his case be fast-tracked. The hearing of this case is to be held today. Icahn has said that the company’s directors are just bull-dozing through the “going-private” transaction instead of giving investors the breathing space to make a prudent and concerted decision about whether they really want this counter-offer or not.