Partners: Carl Icahn Lawsuit Won't Stop Michael Dell's $100 Billion Vision

Partners said Carl Icahn's lawsuit to try to undermine Dell Technologies' proposal to take the company public through a VMware stock swap is nothing more than a speed bump that will not stop Dell CEO Michael Dell's $100 billion vision.

"With Michael Dell at the helm of anything, I have learned through just years of experience that there's very little Michael can't get done that he wants to get done," said Michael Tanenhaus, CEO of Mavenspire, an Annapolis, Md.-based Dell partner. "Carl Icahn enjoys being in the news cycle. There's a reason there's a title called 'activist investor.’ This kind of stuff is what he does for a living."

The legal battle between activist investor Icahn and Michael Dell was ratcheted up Thursday as Icahn and Icahn affiliates filed a lawsuit against Dell alleging that the company did not disclose financial information relating to its proposed $21.7 billion share swap with its DVMT VMware tracking stock, which would see Dell buy out DVMT stockholders before listing its own shares on the New York Stock Exchange.

[Related: Carl Icahn Sues Dell Over Alleged Financial Disclosure Failure: The Battle Begins]

"To assess whether minority stockholders have been adequately protected, it is imperative that we are permitted to review the company's relevant books and records. What is Dell hiding?" said Icahn and Icahn affiliates in a release, urging shareholders to vote against the proposed transaction. "DVMT stockholders deserve to know the full and objective truth!" they said in the release.

In a statement to CRN, Dell said it "strongly disagrees with the merits and unfounded allegations of Mr. Icahn's motion" and will be filing a response later Thursday. "The Class V transaction is the result of a very transparent and thorough process including an independent Special Committee representing DVMT shareholders, which was supported by its own financial and legal advisors," said the statement to CRN.

Dell partners said Icahn is trying to set up a roadblock to stop Michael Dell's vision of becoming a $100 billion company by 2022.

"Carl is definitely very vocal on the shareholder side of things. We're all entitled to our opinions on that, but it seems like every step of the way there seems to be another issue, another roadblock being set up," said Michael Goldstein, president and CEO of LAN Infotech, a Fort Lauderdale, Fla.-based Dell partner.

Goldstein said Dell's proposal to become public via VMware is "definitely a good thing" for the channel as it would boost financial investments and help Michael Dell's vision for tight integration across all of Dell Technologies’ seven families of businesses.

"Having the company be public helps with the financial side of things and we’ll probably see greater growth as a public company versus a private company," said Goldstein.

Michael Dell's vision is to create the digital transformation market leader by integrating its seven brands together as technology silos are fading away.

"When customers and decision-makers look at the breadth of the portfolio with all of our strategically aligned businesses—VMware, Dell, Pivotal, RSA, Boomi, Virtustream and SecureWorks—we have really an unmatched set of capabilities. Our innovation engine is cranked up on high, " Michael Dell said in a recent interview with CRN.

Dell’s strategy has taken off this year as the Round Rock Texas-based infrastructure giant has taken over the leadership position in worldwide storage and servers, while the company's PC business continues to grow. One of the key ingredients to this strategy is tighter technology and channel integration with VMware, which Michael Dell told CRN is at an all-time high.

As Dell's market-share growth and technology vision takes hold, the company projects total sales to reach upward of $103.3 billion by 2020.

Partners expect an even closer relationship between Dell and VMware if Dell successfully becomes public through the share swap.

"It would great for our business," said Mavenspire’s Tanenhaus. "I use to wonder whether or not it would be a problem for VMware's business if was pulled into the larger Dell Technologies, but then you see moves like IBM buying Red Hat. So clearly everyone is on the same page about controlling the software that controls the world. So I'm not sure that's a problem for VMware anymore."

The rivalry between Icahn and Michael Dell goes back to 2013, when Icahn launched an unsuccessful bid to prevent Dell and Silver Lake from taking Dell private for $24 billion.

During a keynote presentation at The Channel Company's 2014 Best of Breed conference, Michael Dell was blunt about his feelings toward Icahn, calling the investor "a bad guy."

"He lies. He has no ethical boundaries. He'll say anything, do anything, I have no time for him," said Dell.

Icahn, who recently increased his stake in DVMT tracking stock to 9.3 percent, has a history of ruffling the feathers of companies in which he owns stakes. Icahn, along with investor Darwin Deason, successfully urged Xerox shareholders this year to oppose a sale to Fujifilm Holdings. Icahn and Deason's push resulted in the cancellation of the merger as well as the resignation of Xerox CEO Jeff Jacobson and five board members.

Icahn is also no stranger to lawsuits. In May, he sued AmTrust Financial Services over its plans to go private.

For Dell to become a public company again, DVMT shareholders—other than those shares held by affiliates of Dell Technologies such as Michael Dell and private equity firm Silver Lake—must approve the agreement. Under the terms, shareholders of the DVMT tracking stock would exchange each share of DVMT tracking stock for 1.3665 shares of Dell Technologies Class C common stock, or $109 per share with the aggregate, not exceeding $9 billion.

The critical shareholder vote will take place at 8 a.m. Central time on Dec. 11 during a special meeting of stockholders at Dell's headquarters.