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The Authentic Activist Investor: Dell Inc. (DELL), Transocean LTD (RIG), Herbalife Ltd. (HLF)

Actually, Icahn is proposing something else: he wants to use the company’s cash and borrowings to pay out a large one off dividend (he says $9 a share) and still leave existing investors with full ownership. Icahn’s proposal is not insane but is probably just a way of negotiating a higher price for the buyout. Dell now trades in excess of $14. The market expects Mr. Dell to make a second (and more generous) offer. I would expect the same. In this case I am sure of Icahn’s success.

Transocean LTD (NYSE:RIG)

Transocean, the world’s largest offshore drilling contractor by market capitalization, has answered positively to Icahn’s claims: the company is ready to pay a cash dividend. The board recommended a dividend of $2.24 a share to be paid in installments from June 2013 to March 2014. This is less than Icahn’s $4 claim, but it gives a hint on how the company reacts to shareholder pressure. The move might seem bold for a company which is trying to de-leverage and reduce its $12 billion gross debt position while is preparing to face up to $2.6 billion on further claims on its involvement in the Deepwater Horizon disaster. That said, I think Icahn has made his numbers and he must be sure that the company can pay what he is asking for. After all, he owns 5.6% of the company. Undoubtedly, there is nothing better than the keen eye of a smart owner to push on better cost management and results.

One thing we should learn from people like Icahn is that best results are attained when we think a businessman. Stocks represent real ownership of real businesses and shareholders hold a great deal of power. In my opinion, investors like Icahn make the market a better place for all investors. Through their fights, minority shareholders end up (almost) always in a better place.

The article The Authentic Activist Investor originally appeared on and is written by Federico Zaldua

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