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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 the subsequent press release presenting Blackstone's "Strictly Private and Confidential Letter," issued by the Special Committee of the Board of Directors of Dell Inc. through its own public relations adviser, see


For the original 9:43pm version of this article distributed to Forum participants, click here.

Source: The Wall Street Journal, April 18, 2013 article


BUSINESS  |  Updated April 18, 2013, 11:33 p.m. ET

Blackstone Ends Pursuit of Dell


Blackstone Group LP has ended its pursuit of Dell Inc., less than a month after the private-equity firm said it would try to top a leveraged buyout by the computer maker's founder and a rival investment firm.

Blackstone had been putting together a bid for Dell to trump the $24.4 billion offer from founder and Chief Executive Michael Dell and private-equity firm Silver Lake Partners. Blackstone's offer would have kept part of the company in the hands of public shareholders.

Blackstone, in a letter to the special board committee handling the deal negotiations for Dell, cited declining personal-computer sales industrywide as a factor in its decision, along with concerns about declines in Dell's operating income, according to people familiar with the matter. A Blackstone spokesman declined to comment.

A Dell spokesman declined to comment.

The Blackstone team was in Texas last week conducting due diligence on the company, and its review raised doubts about the future of Dell's PC business, said people familiar with the matter.

Blackstone had been studying ways to free up Dell cash that is held abroad without incurring a multibillion-dollar tax bill, according to a person familiar with the company's thinking. It isn't clear if this issue also factored into Blackstone's decision.

Investor Carl Icahn also had said he planned to bid for Dell.


Getty Images

Since Blackstone formally expressed its interest in making a bid for Dell in late March, more evidence emerged of a sinking market for personal computers, Dell's largest source of revenue.


A special committee of Dell board members earlier said it believed both potential counter bids could be superior to the Silver Lake deal and that it would evaluate both offers should either Blackstone or Mr. Icahn present a firm bid.

The halt to Blackstone's rival deal effort leaves Silver Lake and Mr. Dell in a stronger position to push ahead with their offer to buy all of the company's shares not owned by Mr. Dell and his affiliates for $13.65 apiece.

Still, investors hoping for a sweeter offer had pushed up Dell shares above the proposed buyout price, and several large Dell shareholders had agitated against the deal from Silver Lake and Mr. Dell.

Southeastern Asset Managment Inc., Dell's largest outside shareholder, with more than 8% of its stock, was also its most vocal against the buyout, saying the $13.65 share price undervalued the company's stock and the proposed buyout from Silver Lake and Mr. Dell didn't give current shareholders ample chance to participate in any upside of a revival of the company.

Southeastern had been prepared to roll its stake into a Blackstone bid, people familiar with the matter have said.

It is still possible Southeastern would vote against the Silver Lake deal. On Thursday evening, a Southeastern spokeswoman didn't have an immediate comment.

Since Blackstone formally expressed its interest in making a bid for Dell in late March, more evidence emerged of a sinking market for PCs, Dell's largest source of revenue.

Last week, market-research firm IDC said global shipments of personal computers fell nearly 14% in the first quarter from a year earlier.

IDC said it was the worst quarterly drop for PC shipments since it started tracking the data in 1994. Dell shipped 11% fewer PCs than a year earlier, according to IDC.

Just Thursday, Blackstone's president, on the company's earnings call, emphasized the company's commitment to technology-sector buyout deals. Hamilton "Tony" James said, "We're serious about tech. We like the space. It's not a space with as many credible players as some of the other industries."

Blackstone had been in negotiations with Mr. Dell on whether he would roll into their deal the 16% of shares he and his affiliates control, as he is doing with Silver Lake, people familiar with the discussions said. Blackstone's letter to Dell's board thanked Mr. Dell for his cooperation with Blackstone.

The two sides had several meetings, but it remained unclear if they could reach a deal that would leave Mr. Dell controlling the future of his namesake company, a condition he attached to rolling his stake, one of the people said.

Blackstone had also been in talks with other potential CEOs for Dell.

Dell, under a deal struck by the special committee, agreed to reimburse Blackstone for up to $25 million for its work in considering a formal bid.

In 4 p.m. Nasdaq Stock Market NDAQ -1.27%trading Thursday, Dell shares were at $13.95, down 2 cents.

—Ryan Dezember
contributed to this article

A version of this article appeared April 19, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Blackstone Abandons Its Pursuit Of Dell.

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.

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