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The Shareholder Forumtm

special project of the public interest program for

Fair Investor Access

Supporting investor interests in

appraisal rights for intrinsic value realization

in the buyout of

Dell Inc.

For related issues, see programs for

Appraisal Rights Investments

Fair Investor Access

Project Status

Forum participants were encouraged to consider appraisal rights in June 2013 as a means of realizing the same long term intrinsic value that the company's founder and private equity partner sought in an opportunistic market-priced buyout, and legal research of court valuation standards was commissioned to support the required investment decisions.

The buyout transaction became effective on October 28, 2013 at an offer price of $13.75 per share, and the appraisal case was initiated on October 29, 2013, by the Forum's representative petitioner, Cavan Partners, LP. The Delaware Chancery Court issued its decision on May 31, 2016, establishing the intrinsic fair value of Dell shares at the effective date as $17.62 per share, approximately 28.1% more than the offer price, with definitive legal explanations confirming the foundations of Shareholder Forum support for appraisal rights.

Each of the Dell shareholders who chose to rely upon the Forum's support satisfied the procedural requirements to be eligible for payment of the $17.62 fair value, plus interest on that amount compounding since the effective date at 5% above the Federal Reserve discount rate.

Note: On December 14, 2017, the Delaware Supreme Court reversed and remanded the decision above, encouraging reliance upon market pricing of the transaction as a determination of "fair value." The Forum accordingly reported that it would resume support of marketplace processes instead of judicial appraisal for the realization of intrinsic value in opportunistically priced but carefully negotiated buyouts.



The letter referenced in the article below was reported in an SEC filing by Southeastern Asset Management that also disclosed the investor's demand for a list of stockholders "to enable communications with fellow stockholders on matters relating to the stockholders’ common interests, including the proposed go-private transaction."

Southeastern has granted permission to report that it is acting independently of the Shareholder Forum in relation to its interests in Dell. Participation in the Forum's Dell valuation project will not involve any communication with Southeastern or their solicitation of proxies.


Source: The Wall Street Journal Deal Journal, March 5, 2013 article


WSJ Blogs

Deal Journal

An up-to-the-minute take on deals and deal makers

March 5, 2013, 8:59 AM

Southeastern Says Dell Emphasizing Struggling PC’s to Justify Deal Price

Dell Inc.'s largest independent shareholder believes the company is “intentionally emphasizing” the struggling personal-computer in order to justify a buyout from founder Michael Dell and private-equity group Silver Lake.

Southeastern Asset Management sent a new letter to the board of directors of Dell on Tuesday alleging the company’s recent results underplayed the turnaround at the PC maker, a turnaround the buyout group will look to capitalize on.

Specifically, Southeastern, which has said it won’t vote for the deal at the current price, took issue with Dell’s decision not to include more detailed results on its segments and not to address questions about the buyout.

“Given the significance of the pending, go−private transaction, shareholders should be provided with meaningful, straightforward information,” Southeastern wrote. “By changing to product segment reporting going forward, but not providing this information for the period just ended, we believe management is intentionally emphasizing declining PC sales in order to justify its inadequate buyout price.”

The shareholder said the results should show that “PCs are of low and shrinking importance to Dell, whereas most of Dell’s value comes from its healthy, growing Enterprise segment.”

Instead of transferring the “risk” of the company’s transformation to the buyout group, Southeastern feels the deal should be classified as giving the buyout group “the opportunity” of the transformation.

A Dell spokesman wasn’t immediately available for comment Tuesday.

The stock rose a fraction in premarket trading to $14.04, adding to gains above the agreed-upon buyout price of $13.65.

Dell’s fiscal fourth quarter, ended Feb. 1, showed a 31% drop in profits and an 11% slide in revenue. The company said it would report its results in different segments for the coming fiscal year, but not the just-ended quarter.

Southeastern also took issue with the buyout group’s use of Dell’s cash. The shareholder said it has in the past been told Dell’s cash was “trapped” overseas and unavailable for shareholders. That led it to be “surprised” that Dell’s “long-standing position” had switched in order to fund the deal. Mr. Dell and Silver Lake have said they plan to use up to $8.4 billion of Dell’s overseas cash, repatriating it for the $24.4 billion buyout.

“A more equitable approach would have returned the cash to all shareholders instead of using it to fund the proposed buyout at the expense of other shareholders,” Southeastern said.

The investor, which holds 8.4% of shares, though a smaller voting percentage, had said last month that it believed Dell’s buyout undervalued the stock and that Dell could have used the cash to pay shareholders a dividend.

Copyright ©2013 Dow Jones & Company, Inc. All Rights Reserved


This project was conducted as part of the Shareholder Forum's public interest  program for "Fair Investor Access," which is open free of charge to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The management of Dell Inc. declined the Forum's invitation to provide leadership of this project, but was encouraged to collaborate in its progress to assure cost-efficient, timely delivery of information relevant to investor decisions. As the project evolved, those information requirements were ultimately satisfied in the context of an appraisal proceeding.

Inquiries about this project and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.