The analysts note that Icahn has no experience running technology companies, and they don't think he wants to undertake the long-term struggle to revamp the company. Roger Kay of Endpoint Technologies Associates and others note that Icahn's past patterns have been to push for selling and spinning off assets as a way to bring quicker returns to investors.
If Icahn gains control of Dell Inc. and follows such past patterns of quickly selling assets, then analysts predict jobs could be cut as parts of the business are sold off. To be sure, not every Icahn investment has led to big asset sales, but many have.
"Icahn is a plague on Dell Inc. from an operating perspective," Kay said. "There is nothing good that he brings to the company."
Icahn already has signaled that, if he and his slate of directors gain control of the Dell board of directors sometime in the future, Michael Dell probably would be ejected as CEO.
"I don't think (Michael Dell) has done a good job, and I think the board has been asleep on the switch," Icahn told Bloomberg TV last week. "They should have held him accountable years ago. They have had a very poor performance. Instead of saying that you are out of here, they are going to reward him."
"A new CEO in this company would be a major plus," Icahn said in a separate story by the Wall Street Journal. Icahn hasn't said who he would tap as CEO if he gains control of the company.
But analysts including Kay say that the management buyout is Dell Inc.'s best hope for recovery and that will involve a lengthy retooling of the company.
"There is no magic bullet," Kay said. "Michael is not saying there is a quick fix. He is promising hard work and suffering over the next five years or longer to complete this transformation. And he wants to do it without looking over his shoulder at a volatile stock price."
A few major Dell Inc. investors have said they plan to side with Icahn and against the buyout offer. Those include Southeastern Asset Management, Austin-based Yacktman Asset Management and Pzena Investment Management.
Win or lose, Michael Dell has pledged to stay with the company.
"I will remain committed to doing my utmost for the company," he said in a presentation to investors. "I founded the company, and I will continue, as I have for the last 29 years, to try to make Dell the best company I can. I will also oppose the kind of imprudent recapitalization that has been suggested by certain other parties," meaning Icahn.
What that suggests to Kay is that Michael Dell will continue to battle against Icahn's plans for Dell Inc. even if the buyout is voted down, while Icahn has indicated he would try to get his own slate of directors named to Dell's board at a future regular shareholder meeting. If he is successful, Icahn could try to fire Michael Dell as CEO while supporting his plan to restructure the company.
Institutional Shareholder Services weighed arguments from both sides and issued a report last week that recommended shareholders accept the buyout deal. It reasoned that potential investment risks from voting down the buyout deal outweighed the likely investment gain.
The conclusion of ISS and two other investment advisory firms was viewed as a boost for the pro-buyout camp. The advisory firms are paid to offer impartial guidance to institutional investors when they are confronted with situations such as buyout offers for stock that they own. Many institutional investors are expected to vote according to the recommendation of the advisory firms.
"This gives (Michael Dell) a little more momentum," said Austin investment adviser Jim Nolen. The dispute with Icahn "is a political campaign right now, and Michael Dell has got the independent voters with him" because of the ISS report.
Technology analyst Rob Enderle with the Enderle Group also believe believes that, in the end, Michael Dell has the upper hand in the fight for the future of the company he founded.
"This is Dell's fight to lose," he said. "Dell is offering investors a sure thing. The Icahn deal is going to lose because there is too much downside risk" to investors.
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