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Dell and Icahn Outline New Takeover Rules

By Justin Loiseau - Apr 16, 2013 at 5:50PM

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Let the proxy fight begin.

Dell (NASDAQ: DELL) announced today its board has taken steps to limit a voting-power takeover by Carl lcahn in an effort to elicit the best possible buyout package from the billionaire investor and his affiliates.

Icahn and Dell have reached an agreement whereby Icahn and his affiliates will not own more than 10% of Dell's shares and not enter into any agreement with other shareholders that would bring collective ownership (and thereby influence) above 15% of total shares.

This latest agreement comes six days after Icahn Enterprises received approval to terminate the normal waiting period usually required to acquire up to a 25% ownership stake.

With this agreement in place, Dell is setting itself up to receive a superior buyout proposal from Icahn Enterprises, above and beyond the current $24 billion offer currently on offer from founder/CEO Michael Dell and private-equity firm Silver Lake Partners.

Icahn currently owns approximately 5% of Dell, and this newest agreement should allow him more wiggle room (within the newly defined boundaries) to align with other shareholders. According to Reuters, Icahn is quoted as saying: "I want to make it very clear that I have retained the absolute right to conduct a proxy fight at Dell. In fact, I have refused to take a $25 million expense reimbursement from Dell as the price of giving up a proxy fight."

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