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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 similar reports of the same executive contradicting official company statements with positive views of Dell's prospects in trade papers less likely to reach investor audiences, see


Source: The Wall Street Journal, April 24, 2013 article


WSJ Blogs

April 24, 2013, 7:40 PM

Dell Talks Up Its Software Future



Dell Inc.

John Swainson, Dell’s top software executive.

Dell may be in Wall Street’s doghouse for its reliance on sales of unloved hardware like personal computers. But the company sees a bright future in software.

At an event Wednesday in San Francisco, Dell executives outlined ongoing efforts to stitch together software and tech services the company has scooped up in a recent-years acquisition spree, as Dell seeks to morph into a mini-IBM with a range of software products and other corporate technology boasting better profit margins and loftier growth prospects.

Dell executives discussed software to help companies that are struggling to keep tabs on the smartphones, tablet computers and other personal devices they take from home, and expect to use for workplace tasks. Dell also talked about a new version of a service CA called Toad Business Intelligence–one Dell executive joked about the odd name–for mining company databases for useful information.

At the event, Dell software boss John Swainson described software as the “glue” that holds together the hardware parts of the company, and newer information-services products. (Swainson also apologized for wearing a suit and tie–not a typical wardrobe in the software industry, or in San Francisco. He explained the formal wear was for a Visa board meeting.)

Dell says its software businesses are on track for more $1.5 billion in annual revenue, though the company hasn’t detailed when that figure would be reached.

The product focus comes at a key time for Dell, which is seeking to keep its employees and corporate customers focused amid the noise around a proposed $24.4 billion offer to buy out the company’s public shareholders. That offer, led by private-equity firm Silver Lake Partners and Chief Executive Michael Dell, has faced opposition from some large shareholders.

In an interview, Mr. Swainson said Dell’s customers haven’t really been asking about the buyout deal. He said the buyout doesn’t change Dell’s approach to products, nor its relationship with customers.

Mr. Swainson, asked what people would find surprising about Dell’s efforts to become a software-and-services company, singled out the speed of the company’s transformation. “I think it’s further along than people would think,” he said.

That wasn’t the opinion of officials at Blackstone Group. The private-equity firm last week dropped its efforts to put together a rival buyout bid for Dell. Blackstone officials reviewing Dell’s financials and strategy worried it would take too long for Dell’s software and corporate-technology offerings to get to the size and scope needed to compete effectively, people familiar with Blackstone’s position have said.

Mr. Swainson, a veteran of IBM who also helped software company CA Inc. recover from an accounting scandal, had stepped away from operating roles when he retired from CA at the end of 2009. Then Mr. Dell last year swooped in to ask if Mr. Swainson would help build Dell’s software business from scratch.

Mr. Swainson said he didn’t need too much arm twisting. “This was something new and exciting and different – and frankly hard,” he said.

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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