Vivus CEO to quit, while Dell buyout offer suffers lack of support
Two of the ugliest US proxy battles of the season have lurched closer to an end after months of fighting – and activist investors seem poised to score points in both.
The news out of PC maker Dell and obesity drug maker Vivus, which were both scheduled to hold shareholders’ meetings on July 18 after months-long bitter battles with key investors, is still uncertain. But Dell investor Carl Icahn and Vivus investor First Manhattan might already be celebrating.
Dell delayed its meeting until July 24 after reports that company founder Michael Dell failed to gain enough investor support for his $24.4 bn bid to buy out the company and take it private.
The setback for the company founder represents a step forward for Icahn. The billionaire investor, who owns an 8.7 percent stake in Dell, has waged a campaign throughout this year against the founder’s offer and in favor of his own plan to overhaul the board and tender a $14-a-share offer that would keep the company public.
‘It is unfortunate, although not surprising, that Dell’s board and special committee have delayed the date of the special meeting at which stockholders can vote on the Michael Dell/Silver Lake freeze-out transaction,’ Icahn says in a joint statement with Southeastern Asset Management, which backs his bid.
‘We believe that this delay reflects the unhappiness of Dell stockholders with the Michael Dell/Silver Lake offer, which we believe substantially undervalues the company.’
The Vivus shareholder meeting scheduled to run at the same time was also delayed in an apparent victory for FMC, owner of a 9.9 percent stake in the drug maker, after a bitter proxy battle marred by mutual accusations of illegal and unethical activity.
A deal reached between the two would see FMC gaining six of 11 seats on a newly expanded board, with Vivus retaining only four, the companies say in a joint press release. The remaining seat would be held by an independent director. Leland Wilson, the chief executive officer, will be replaced by Tony Zook, the former AstraZeneca executive supported by FMC for the job.
‘We are grateful for the strong support we have received from Vivus stockholders,’ Sam Colin, senior managing partner at FMC, comments in the release. ‘The new board and Tony Zook share a strong commitment to realizing Vivus’ true potential and putting the company on a trajectory of growth and value creation.’ The deal will come to a vote within 30 days, the companies say.
