Icahn refuses Dell's proxy battle plea

Active investor Carl Icahn snubs board's plea to play by its rules

Active investor Carl Icahn has confirmed he has no intention of playing nice during Dell's takeover showdown if he decides a proxy fight or litigation suits shareholders better.

Icahn may be one of three potential bidders vying for control of Dell, but he has also threatened to pursue a proxy fight to force the firm to pay a large dividend if the sale process does not progress to his satisfaction.

Dell has already agreed to reimburse rival bidding groups led by Silver Lake Partners and Blackstone to the tune of $25m (£16.3m) for the cost of doing due diligence.

A team of Blackstone staff is set to descend on Dell's Texan headquarters today to begin a thorough review of its books, according to reports.

On Friday, a special committee of Dell directors wrote to Icahn to say it would reimburse his costs only if he "will commit contractually to work within our process". This would stop the billionaire investor, who owns a 4.6 per cent stake in Dell, from throwing a spanner in the works with a proxy fight or litigation.

However, in an interview with the Wall Street Journal, Icahn confirmed he is still considering calling for a dividend instead of a buyout, which would require a proxy fight.

"How does using up corporate funds to pay me to walk away from an offer that the board does not like, but that shareholders may, help other shareholders?" he said.

"No matter how much they are willing to pay to reimburse me, I am not going to give up the right to put in a bid that I think will be compelling to shareholders, even if the board does not like it."

Both Icahn and Blackstone submitted preliminary bids that the special committee has said could be considered superior to the original $13.65-a-share offer from Silver Lake that valued Dell at $24.4bn.

While Silver Lake's bid would put Michael Dell (pictured) at the helm of the firm he founded in 1984, it is as yet unclear whether the Texan entrepreneur will back a formal offer from Blackstone given it is likely to dilute his influence over the firm.

Blackstone has at least met with Dell - the man - several times, according to the FT, while Icahn is reportedly yet to secure an audience with the billionaire PC baron.

It could take another month before Blackstone's team assembles a formal bid, but the private equity house has indicted it will stump up at least $14.25 a share for the firm.