A group of six pension funds is accusing Dell Inc.'s board of manipulating the shareholder voting process by changing rules for a vote on the proposed buyout of the company by Michael S. Dell and Silver Lake Partners, according to a law suit filed in the Court of Chancery of Delaware.
The complaint against Mr. Dell and other directors was filed as a class action Friday by the $731 million Wayne County Employees Retirement System, Detroit; the $657 million Oakland County Employees' Retirement System, Pontiac, Mich; the $66.7 million Boynton Beach (Fla.) Firefighters Pension Fund; as well as the City of Roseville (Mich.) Employees' Retirement System, Electrical Workers Pension Trust Fund of IBEW Local Union No. 58, and the IBEW Local Union No. 58 Annuity Fund.
The pension fund group seeks an injunction to require Dell to hold a meeting that will allow shareholders the choice to vote between the Dell/Silver Lake proposed buyout or a joint proposal by Carl Icahn, affiliated Icahn funds and Southeastern Asset Management Inc.
The Dell/Silver Lake proposal would take the company private offering $13.75 a share and a 13-cent per share special dividend. The Icahn/Southeastern proposal offers $14 a share and keeps the company public, allowing “Dell's public shareholders to receive an immediate cash payment while having the chance to share in the company's future growth,” the complaint states.
David Frink, Dell spokesman, said he has no comment about the lawsuit.
Mr. Icahn and Lee B. Harper, principal and head of client portfolio management, couldn't be reached for comment.
A Chancery Count hearing on the case has been scheduled for Friday, Allan Ripp, spokesman for Grant & Eisenhofer, a law firm representing the plaintiffs, said in an e-mail response to questions.
Dell, which initially set the vote on only the buyout proposal July 18, has rescheduled and postponed the vote three times; it currently is slated for Sept. 12. In addition, the company has reset the record date for shareholder eligibility to vote to Aug. 13 from June 2.
The case has been consolidated with a separate suit filed by Mr. Icahn also challenging the Dell vote.