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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 earlier New York Post report referenced below, distributed to Forum participants the previous day, see


Source: The Wall Street Journal, May 7, 2013 profile


BUSINESS  |  May 7, 2013, 1:55 p.m. ET

Icahn, Southeastern Weigh Teaming Up on Dell Nominations


Southeastern Asset Management Inc. and investor Carl Icahn are talking about teaming up to nominate directors to the Dell Inc. board as part of an effort to derail the computer maker's $24.4 billion leveraged buyout, people familiar with the matter said.

The two Dell shareholders have been publicly against the buyout inked by private-equity firm Silver Lake Partners and company founder Michael Dell, saying it undervalues the company. Mr. Icahn made a preliminary counterbid for Dell but has since abandoned that avenue in favor of a more-hostile approach, a person familiar with his thinking said.

He and Southeastern see nominating directors as a potential way to signal to shareholders that Dell has other options should they vote down the buyout, people familiar with those discussions said. Also, if shareholders do vote down the deal, having members on the board could give Southeastern and Mr. Icahn more leverage to direct the company's next move.

There is a May 13 deadline to nominate directors to the Dell board.

The New York Post reported earlier that Mr. Icahn was preparing to team with Southeastern on such a strategy.

It is possible the effort could be fruitless even if Southeastern and Mr. Icahn move forward with the plan.

The shareholder vote on the Dell buyout will almost certainly take place before investors get to vote on nominees for the board. If the Silver Lake deal gets approved, a vote for a new slate of board candidates would likely be moot. The company hasn't announced a date for either the vote on the deal or the annual meeting.

The Silver Lake deal would pay Dell shareholders $13.65 per share. Currently shares are trading around $13.28.

Southeastern and Mr. Icahn have teamed up before. In 2012, they worked together to push Chesapeake Energy Corp. to replace half its board with new directors.

On Dell, Southeastern and Mr. Icahn have separately argued that the company is being sold too cheaply and that Dell should borrow money and return capital to shareholders rather than fund a buyout.

Southeastern, Dell's largest outside shareholder with 8.4%, went public with its opposition to the buyout days after the company announced the deal in early February. Mr. Icahn later said he amassed a 4.6% stake in the company.

The two have considerable sway with their combined stake. But so does Mr. Dell, who holds 14% of Dell shares.

Mr. Icahn last month reached a deal with the Dell special committee that allows him to consult with other holders as long as he doesn't form a group that would give him control of more than 15% of Dell shares—which would top Mr. Dell's holdings—or amass more than a 10% stake on his own.

Write to Sharon Terlep at

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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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