The board of
) has fixed the ownership stake of Carl Icahn and his associate
entities to not more than 10.0% of the company's shares.
This deal also covers shareholders other than Ichan, who would
jointly hold more than 15.0% of Dell's outstanding shares.
Some of Dell's shareholders have expressed their
dissatisfaction with Michael Dell's offer, after which Ichan and
) have raised the bid.
Icahn already has a leading position among minority
shareholders and could therefore make it difficult for Michael
Dell to acquire the controlling stake.
Moreover, this has been a major hurdle for Dell's board, who
were more inclined toward Michael Dell and an investment group
led by Silver Lake Partners to take the controlling stake.
Icahn has announced that he has rejected Dell's offer of $25.0
million as expense reimbursements if he agreed not to attempt a
The latest decision regarding the stake came quickly, as Icahn
Enterprises received an approval to terminate the normal waiting
period -- i.e. within a period of 6 days -- which is generally
needed before somebody can acquire a 25% ownership stake.
Considering the latest developments, Dell's future remains
uncertain. In the past year, the company has had its share of
challenges, as cutthroat competition from
), as well as a restricted spending environment hurt
Moreover, privatization might help Dell move away from public
scrutiny, but the decision regarding ownership is taking some
time to settle.
Dell Inc. has a Zacks Rank #5 (Strong Sell). Therefore, we
would instead recommend
), which has a Zacks Rank #2 (Buy).
), which carries a Zacks Rank #1 (Strong Buy) also looks
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