Carl Icahn boosts his stake in Dell tracking stock to 8.3%

After Icahn’s latest purchases, he has become the second biggest shareholder of Dell’s tracking stocks.

In a strategic development, activist investor Carl Icahn has reportedly increased his stake to 8.3%, up from 1.2%, in Dell tracking stock as he looks to block a proposed plan to take Dell public again.

In July, Dell Technologies 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 – a plan that was resisted by hedge fund investors and Icahn on the grounds that the deal significantly undervalues the tracking stock.

“I intend to do everything in my power to STOP this proposed DVMT merger,” said Icahn in an open letter to stockholders. “It is better to have peace than war, but be assured, I still enjoy a good fight for the right reasons.”

Earlier this month, Dell had revealed it had met with some investment banks to explore an initial public offering if its plan to buy the tracking stock of VMware falls through.

Hedge funds, including Canyon Capital Advisors LLC and Elliott Management Corp have resisted Dell’s effort to buy back the “tracking stock” from them, arguing that Dell’s offer inflates its own value and discounts the tracking stock’s value.

“The Dell Tracker currently sells for approximately $92 per share but is worth on a pure mathematical basis approximately $144 per share,” said Carl Icahn.

Silver Lake and Dell did not immediately respond to requests for comment.

Icahn’s current stake makes him the second largest shareholder in the Dell tracking stock.

According to Icahn, the best way forward would be to offer a competing partial bid that provides partial liquidity without forcing a merger; he went on to add, he was looking at interested parties, including financing sources, who may want to finance such a bid.

In a strategic development, activist investor Carl Icahn has reportedly increased his stake to 8.3%, up from 1.2%, in Dell tracking stock as he looks to block a proposed plan to take Dell public again.

In July, Dell Technologies 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 – a plan that was resisted by hedge fund investors and Icahn on the grounds that the deal significantly undervalues the tracking stock.

“I intend to do everything in my power to STOP this proposed DVMT merger,” said Icahn in an open letter to stockholders. “It is better to have peace than war, but be assured, I still enjoy a good fight for the right reasons.”

Earlier this month, Dell had revealed it had met with some investment banks to explore an initial public offering if its plan to buy the tracking stock of VMware falls through.

Hedge funds, including Canyon Capital Advisors LLC and Elliott Management Corp have resisted Dell’s effort to buy back the “tracking stock” from them, arguing that Dell’s offer inflates its own value and discounts the tracking stock’s value.

“The Dell Tracker currently sells for approximately $92 per share but is worth on a pure mathematical basis approximately $144 per share,” said Carl Icahn.

Silver Lake and Dell did not immediately respond to requests for comment.

Icahn’s current stake makes him the second largest shareholder in the Dell tracking stock.

According to Icahn, the best way forward would be to offer a competing partial bid that provides partial liquidity without forcing a merger; he went on to add, he was looking at interested parties, including financing sources, who may want to finance such a bid.

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