WILMINGTON, Aug 17: Activist investor Carl Icahn’s legal effort to derail a $25 billion takeover of Dell Inc stalled after a judge refused to fast-track his lawsuit against the personal computer maker, blunting an integral part of his months-long opposition campaign.

Delaware Court of Chancery Judge Leo Strine on Friday waved off Icahn’s request to accelerate the lawsuit, dismissing claims that the company and its board wronged shareholders by accepting an undervalued offer from Chief Executive Michael Dell.

Icahn had hoped to head off a Sept. 12 special shareholders’ vote on a takeover proposal that the hedge fund billionaire and other major investors argue cheapens the company. He wanted the company to hold its annual general meeting — at which he intends to try and replace the board — at the same time as the vote, hoping that will force the CEO to put his best and final offer on the table.

But Strine was dismissive of Icahn’s argument that Dell Inc, and the special committee formed to review the buyout offer, was trying to push the CEO’s deal at the expense of shareholders. He opened the proceedings with a 45-minute reading of a prepared opinion, and no lawyers from either side got the chance to speak.

The broader conflict between CEO Dell and Icahn adds more uncertainty to a company that once ruled the global personal computer market, but is now trying to move into the relatively unfamiliar field of enterprise computing services as mobile devices pummel sales of computers and laptops.

Dell marks the latest board skirmish for the 77-year-old New York investor, who specialises in buying stakes in companies in flux and agitating for change. He has recently had run-ins with management at Biogen and Transocean Ltd. He holds 8.9 per cent of Dell Inc, making him the second-largest shareholder behind Michael Dell, with about 16pc.

Dell argues its special committee has done everything it can to safeguard shareholders’ interests, and has said the decision to hold the annual general meeting on Oct 17 means it will take place swiftly after the special vote. “It is probably within the time the court itself might set,” Strine said on Friday, referring to the meeting.Under Delaware law, company annual general meetings have to be held within 13 months of each other or shareholders could sue to force one. Strine said an Oct 17 date would be considered overdue, but added it was not uncommon for corporations to hold late shareholder meetings.

Lawyers for both sides did not respond to requests for comment. Icahn plans to use the October meeting to launch an assault on Dell’s upper echelons. The investor and Southeastern Asset Management filed a preliminary proxy statement on Friday urging investors to elect their slate of nominees to the board.

They include Rahul Merchant, New York City’s chief information officer; Jonathan Christodoro, managing director at Icahn Capital; Icahn Enterprises President Daniel Ninivaggi, who previously sat on the board of Motorola Mobility; and Harry Debes, a technology veteran who is an operating partner with buyout firm Advent International Corp.

Some of the conflict has centred on the company’s worsening fundamentals. On Thursday, it reported a 72pc plunge in second-quarter earnings that analysts say stresses the urgent need for a serious business overhaul and shores up the attractiveness of Michael Dell’s offer.

But Southeastern, which holds about 4pc of Dell’s stock, argued on Friday that the results showed a strong increase in cash flows and robust growth in revenue from enterprise software and services, supporting its case that the company still had strong long-term prospects and that the CEO’s proposal thereby undervalued the company. More immediately, Icahn has to make his case in court.

Icahn’s legal team has said in court papers that the question before the court is “whether our law will allow these directors to act as Platonic guardians, repeatedly refusing to take ‘no’ for an answer on the merger, stacking the cards in its favor and deliberately postponing the annual meeting.”

Icahn also wants Dell Inc to reverse its decision to nullify abstentions from the buyout offer’s vote count, reverting to treating them as opposing votes. Such a move is negative for the CEO’s camp, which estimates that holders of almost a quarter of eligible shares will abstain from voting.

Strine said on Friday he saw no evidence the company was trying to rig the shareholders’ votes. Friday’s courtroom drama was a facet of battle waged since March between Michael Dell, who wants to overhaul the company he created in college in 1984 away from the investor spotlight, and shareholders like Southeastern Asset Management who want a higher price.

Michael Dell and Silver Lake have already sweetened their offer. On Aug 2, they delivered what they called their final offer, a special dividend of 13 cents a share on top of a 10-cent increase in the sale price to $13.75 per share. Dell’s shares rose 0.8pc to close at $13.82 on Nasdaq. They had traded around $10 before news of the buyout offer emerged in February. —Reuters