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The Morning Brief: Icahn Joins Dell's Buyout Bash; Paulson Arbs Beat Market; Starboard Takes Star Turn

Carl Icahn is trying to block Michael Dell’s $24.4 billion leveraged buyout of Dell. The computer maker said it received a letter from the activist investor, urging the company to shell out $9 a share to pay a special dividend to shareholders. Dell did not say whether Icahn owns shares in Dell, but CNBC has reported that he owns about 6 percent of the company. Michael Dell has teamed up with Silver Lake and Microsoft to offer $13.65 a share. Icahn is asking the company to hold a vote for new directors at the same meeting that it asks investors to approve the buyout deal. He also said he would put up a slate of his own directors and use his publicly-traded company, Icahn Enterprises, to provide a $2 billion bridge loan to make the special dividend payment and he would personally provide a $3.25 billion bridge loan to Dell.
Meanwhile Icahn disclosed he had bought another two million shares of Herbalife roughly, lifting his stake to 15.55 percent of the company. As a result, shares of the nutrition supplements company jumped more than 1 percent in after hours trading, to around 41.50.

This just in from John Paulson. Paulson & Co.’s gold fund was down 18 percent in the first two months of this year (the fund only manages about $800 million). Paulson Partners Enhanced fund, specializing in merger arbitrage, is beating the market, gaining 7.7 percent through February. Paulson Credit Opportunities is up 4.4 percent this year and Recovery Fund is up 5.3 percent, while Paulson Advantage Fund, an event-driven fund, lost 2.6 percent through February.

Activist Starboard Value raised its stake in Tessera Technologies to 7.4 percent of the shares outstanding. In its latest response to the specialist in miniature semiconductor components and assemblies, Starboard accused the company of not properly investigating claims made by sources that the company’s CEO may have been engaging in inappropriate behavior. Starboard also criticized the board for not taking its previous demands seriously. Starboard said it now seeks the overhaul of the entire board instead of changing just two directors, as well as other changes. Moreover, the hedge fund firm accused the company of manipulating annual meeting dates and nomination deadlines to prevent shareholders — Starboard specifically — from making changes to the board. Tessera earlier accused Starboard of engaging in a “private attempt at blackmail.”

Back to Agrium. On Thursday the Canadian fertilizer maker said in a press release that an open letter published earlier in the day by hedge fund activist Jana Partners offered “nothing new for shareholders.” The company disputed claims Agrium directors have not invested sufficiently in Agrium’s stock, asserting that Agrium’s directors have a total of $23.7 million at risk in Agrium shares. Excluding the two directors appointed to the board last month, this represents an average of $2.6 million per director. “This may not be a lot of money to Jana CEO and hedge fund billionaire Barry Rosenstein, but it is a lot of money by Canadian standards,” Agrium states.

Steve Cohen’s SAC Capital disclosed it took a 5.3 percent passive stake in Ann, a retailer of women’s apparel, shoes, and accessories under the Ann Taylor and Loft brands. Shares of the company rose slightly to $29 Thursday, up 1.01 percent.

More woes at London-based Portman Square Capital, the much-ballyhoed hedge fund founded by Citigroup’s former head of proprietary trading Sutesh Sharma that has yet to commence trades. The fund sacked CEO Andrew Mack after just five months when the firm realized it would only raise $200 million instead of an original target of $500 million.

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