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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 letter to Dell employees referenced in the article below, see


Source: Bloomberg, April 26, 2013 article




Dell in Rare Feat as PC Speech Gets Investor Cheers


Michael Dell this week accomplished a rare feat in the era of the smartphone: He drew applause after a speech on the future of personal computers.

Dell spoke at the annual meeting of Silver Lake Management LLC, which joined with him to take private the PC maker he founded in 1984, according to attendees who declined to be identified because the event was private. Dell, 48, was the surprise speaker at the dinner hosted by the private-equity firm at the Mandarin Oriental Hotel in Manhattan on Tuesday, the first day of the firm’s two-day meeting for investors, or limited partners.

Dell, who addressed about 300 investors on the condition that he not be asked about the $24.4 billion leveraged buyout of his company, said PCs will remain critical for businesses around the world, according to attendees. The view undercuts reports of record declines in global industry sales, which in part prompted Blackstone Group LP (BX)’s April 18 decision to drop plans to bid for Dell Inc. (DELL) Blackstone also cited the company’s “rapidly eroding financial profile” as a reason for pulling out.

Silver Lake’s leveraged buyout of Dell is an opportunity for investors to profit, said a limited partner who attended the dinner and asked not to be identified. The investor said he believes, like Michael Dell, that the world still needs personal computers because software runs on hardware.

Michael Dell teamed up with Menlo Park, California-based Silver Lake to take the company private in the largest buyout of a technology company since the financial crisis. They offered $13.65 per share in a deal that would require founder Dell to roll over his stake in the company to help finance the transaction.

Blackstone Interest

Blackstone in March expressed interest in acquiring a controlling stake in Dell for $14.25 a share, before dropping out a month later as global PC sales tumbled. Technology research firm IDC said in an April 10 report that PC sales sank 14 percent from a year earlier in the first quarter. Blackstone also cited other concerns. At the end of March, Dell lowered its forecast for operating income for the current year to $3 billion, a 19 percent drop from the previous forecast made around the time of Blackstone’s initial overture in March.

The founder, chief executive officer and largest shareholder of Round Rock, Texas-based Dell, also spoke on Tuesday about the importance for its customer base of information-technology security, the promise of cloud computing and his firm’s plans to develop more products to meet those needs. Dell has invested in some of these areas, with acquisitions last year such as network-security company SonicWall Inc., and Wyse Technology Inc., which makes desktop devices for cloud computing.

Employee Letter

A representative for Silver Lake declined to comment. David Frink, a spokesman for Dell, said that “Dell’s speech reflects the company’s strategy,” while declining to comment further because he wasn’t at the dinner.

Michael Dell’s speech at Silver Lake’s dinner was echoed in a letter he sent to employees earlier that day after meeting the company’s teams in Austin, Round Rock, Oklahoma City and Nashville.

“There is still opportunity in PCs,” Dell wrote in the letter, which was disclosed in an April 23 filing with the U.S. Securities and Exchange Commission. “The global PC installed base is roughly a billion-and-a-half, and millions of people in emerging markets continue to come online every week. Overwhelmingly, PCs are still how business gets done around the world. We are fine tuning and investing in our business to innovate and compete more aggressively where growth is happening.”

Company Executives

This was the first time Silver Lake held its annual meeting in New York, which was also attended by executives of some of its portfolio companies. They include Alibaba Group Holding Ltd.’s Chief Financial Officer Joseph Tsai, and Hollywood talent agency William Morris Endeavor Entertainment LLC’s co-CEOs Ari Emanuel and Patrick Whitesell.

Last year, Silver Lake convened its investors in Pasadena, California, where Microsoft Corp. CEO Steve Ballmer was the guest speaker.

The fact that Silver Lake this month raised a $10.3 billion fund, the largest ever dedicated to buyouts of technology companies, is a sign of investors’ confidence in the firm, said David Fann, CEO of San Diego-based TorreyCove Capital Partners, which advises institutional investors on private equity.

Silver Lake gathered money for the fund “in a difficult fundraising environment,” Fann said. “This speaks volumes about the respect the firm commands from limited partners.”

To contact the reporter on this story: Serena Saitto in New York at

To contact the editor responsible for this story: Jeffrey McCracken at




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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