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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.



For related articles about arrangements for a "stalking horse" and for an alternative proposal, both published shortly after the column below about possible objectives of orchestrated negotiations, see


Source: New York Times DealBook, March 27, 2013 column

Mergers & Acquisitions  |  Breakingviews

A Potential Potemkin Fight Over Dell

Even losers could emerge as winners from the Dell takeover battle. Blackstone Group, Silver Lake Partners, the Dell board and founder Michael S. Dell could stand to benefit from the impression of a hard-fought auction. A Potemkin fight, if that’s what it turns out to be, just may not help shareholders quite so much.

It’s what Wall Street calls the optics of the deal. For the buyout firms, a backdrop for the $24 billion Dell sale is an antitrust lawsuit that a judge earlier this month narrowed but allowed to proceed. Shareholders of acquisition targets from 2003 to 2007 accuse Blackstone, TPG and other private equity shops of conspiring to drive down prices by agreeing not to outbid each other.

One potentially damaging piece of evidence is an e-mail from none other than Blackstone’s president, Hamiliton E. James Jr. to George Roberts, a co-founder of Kohlberg Kravis Roberts & Company: “We would much rather work with you guys than against you. Together we can be unstoppable but in opposition we can cost each other a lot of money.”

While the Dell deal will have no direct bearing on the case, Blackstone’s counterbid seems to undermine such allegations. The 11th-hour offer for the PC maker is a rarity. Go-shop periods almost never lead to a higher bid. In the context of helping to shift perceptions about private equity firms being in cahoots, even Silver Lake might welcome Blackstone’s approach.

New suitors could also help Dell’s board avoid a J.Crew stigma. In the clothier’s 2010 sale, the board succumbed to a leveraged buyout hand-stitched by Chief Executive Millard S. Drexler. After being kept in the dark for more than six weeks while Mr. Drexler and the lead director’s private equity firm, TPG, were teaming up on a bid, independent directors used a go-shop period as a governance fig leaf.

Similarly, if Mr. Dell winds up working with Blackstone, or even negotiates in good faith with the firm, he could come out looking better than Mr. Drexler, who only grudgingly agreed to work with other potential buyers.

Blackstone, or even Carl C. Icahn, may succeed with their bids, but it’s just as likely all the maneuvering won’t bring a better deal for Dell investors. Others involved will at least come away keeping up appearances

Jeffrey Goldfarb is an assistant editor at Reuters Breakingviews. For more independent commentary and analysis, visit

Copyright 2013 The New York Times Company


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.

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