Activist investor and Michael Dell-nemesis Carl Icahn told CNBC on Monday that he owns hundreds of millions of dollars of VMware stock, including shares of the Dell tracking stock for the virtualization business, and wishes he had bought more.
Icahn said in an interview on the business network that when considering Dell's $42 billion debt load, an amount that would be "a lot for a third-world country, yet alone, Michael Dell," that it's clear Dell will have to do "some type of merger with VMware."
Dell has been exploring potential routes to a merger with the virtualization software company of which it owns 82 percent, including through a reverse merger that would allow it to reemerge quickly as a public company.
Icahn's position sets him up for another clash with Michael Dell, who described Icahn at a Channel Company event four years ago as "a very bad guy" after a 2013 dispute around privatizing Dell Technologies.
"We're right there against Dell again. Maybe," Icahn told CNBC, adding he hoped the two wouldn't repeat another shareholder battle.
"I hope he does the right thing and he pays a fair price for it," Icahn said in regard to Dell acquiring VMware.
CNBC had reported on Icahn's position in VMware last month. In Monday's interview, Icahn revealed for the first time he was buying VMware not only through its publicly traded shares, but also through tracking stock Dell has issued that's pegged to the performance of VMware.
About half of Dell's equity in VMware is traded through that tracking stock.
Icahn said he wishes he obtained a "bigger position than I have" in VMware, but the stock "got away from me."
But he confirmed ownership of "a sizeable position" to the tune of hundreds of millions of dollars.
Last week, Dell told federal regulators it was evaluating several potential routes to a merger with VMware.
In that SEC disclosure, Dell said it was soliciting input from investors in the tracking stock linked to the VMware business to gauge their interest in substituting those shares with complete shares of Dell.
Dell took on its massive debt in 2016 to acquire EMC—the deal that also gave it a controlling interest in VMware.
Dell is now considering several options that could help it pay down that debt.
They include a conversion of Dell's VMware tracking stock to Dell common shares, a reverse merger, an IPO, or no action at all.
In an online poll CRN conducted, an overwhelming number of respondents said, of those four options, they would prefer Dell do nothing to bring the companies together.
A Dell spokesperson told CRN the company had no comment on Icahn's statements. VMware also offered no comment.
At the 2014 Best of Breed Conference, Michael Dell told an audience of several hundred of the country's top solution providers that Icahn "lies" and has "no ethical boundaries."
"He will say anything, do anything. I have no time for him," Dell said at that event.