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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.



NOTE: An earlier 10:03am ET version of the article below had been distributed to Forum participants shortly after its publication. The original article did not include the final 6:10pm version's additional reports of analyst reactions (including the controversial research advice of Jefferies, which Icahn has identified as his group's funding source) and that afternoon's Icahn-Southeastern notification of intent to nominate directors at Dell's 2013 annual meeting, also addressed in this video report:


Icahn's Dell Demands: New Board Made of Tech Elite
May 13 (Bloomberg) -- Billionaire Carl Icahn is seeking a seat on Dell's board as part of an effort to scuttle an earlier agreement to be taken private by Silver Lake Management and the company’s founder, Michael Dell. Cory Johnson reports on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

For the Dell committee's letter, the Icahn-Southeastern notices of nominations, and the Icahn advisor's research note addressed in in the news reports, see


Source: Bloomberg, May 13, 2013 article and video

Dell Committee Demands More Information From Icahn
May 13 (Bloomberg) -- Bloomberg’s Cristina Alesci reports on a Dell panel’s letter to Carl Icahn and Southeastern. She speaks on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)




Dell Committee Asks Icahn for More Information on Plan


Dell Inc. (DELL)’s special committee asked billionaire Carl Icahn for more information about his proposed takeover of the personal-computer maker, made last week as a challenge to founder Michael Dell’s $24.4 billion buyout.

In a letter to Icahn today, the committee said it wants more details about the financing for his transaction and asked him to identify the persons he would expect to form the senior management team. It also requested a draft of a “definitive agreement” for the transaction.

Billionaire Carl Icahn

Billionaire Carl Icahn’s proposal, which would allow Dell to remain a publicly traded company, includes $12 share that investors would be paid in cash or additional Dell stock, according to filings. Photographer: Scott Eells/Bloomberg

Icahn Says Dell Won't Run Company If Offer Succeeds


May 10 (Bloomberg) -- Billionaire investor Carl Icahn talks about his alternative offer for Dell Inc. that could enable investors to keep their stakes in the company. Icahn is seeking to upend a $24.4 billion buyout of Dell by its founder, Michael Dell, and Silver Lake Management LLC. He speaks with Trish Regan on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)


Icahn and his partner Southeastern Asset Management Inc. plan to borrow money for Dell to offer $12 a share in cash or stock to investors, while also letting them retain stakes in a public company. The payout would dilute existing Dell shares, which Icahn said would have a value of at least $1.65 apiece. In contrast to Michael Dell’s plan to take the company private, Icahn is asking investors to bet on the future of a PC maker beset by rising competition, tumbling demand and mounting debt.

“The most likely scenario at this point is that Michael Dell’s deal goes through,” Lance Vitanza, an analyst at CRT Capital Group LLC, said in an interview today. “There are a lot of people who don’t want the volatility.”

Icahn is also seeking a seat on Dell board and proposed five other potential board members, according to a filing today.

Dell’s shares rose less than 1 percent to $13.52 at the close in New York, about 1 percent below the $13.65-a-share price CEO Dell and Silver Lake Management LLC are offering to take the company private.

Committee’s Questions

“It is not clear to us whether you intend to formulate your transaction as an actual acquisition proposal that the Board could evaluate and potentially endorse or accept or rather to propose it as an alternative that the Board could consider in the event the pending sale to Silver Lake and Michael Dell is not approved,” the special committee said in today’s letter.

In addition to working capital, Dell is likely to have “other significant cash needs,” such as approximately $1.7 billion of debt maturities within about 12 months after closing, according to the letter.

Lee Harper, a spokeswoman for Southeastern, and Icahn didn’t immediately return calls seeking comment. Gordon Goldstein, a spokesman for Silver Lake, declined to comment on Dell’s letter to the two investors today.

Icahn, who along with Southeastern owns almost 13 percent of the shares, said last week that if he prevails, he would look to replace founder and CEO Michael Dell. Financing for their proposal will come from existing cash at the PC maker and about $5.2 billion in new debt.

Board Proposals

Icahn today proposed himself and five other potential board members, including Harry Debes, former CEO of business-software maker Infor, and Rajendra Singh, CEO of investment firm Telecom Ventures LLC, as part of the effort to scuttle the original agreement.

Icahn also said he would nominate Icahn Enterprises President and CEO Daniel Ninivaggi, and Icahn Enterprises Managing Director Jonathan Christodoro. Southeastern nominated its CEO, Bernard Lanigan, Jr., and five other people, including New York City Chief Information Officer Rahul Merchant. Merchant is an appointee of New York City Mayor Michael R. Bloomberg, who is the founder and majority owner of Bloomberg LP, the parent of Bloomberg News.

Potential Growth

To prevail, Icahn will have to persuade those investors who want to keep an equity stake in Dell that fresh leadership can do a better job playing catch-up in cloud computing while managing greater debt and combating the biggest sales decline in the history of personal computing.

Investors who don’t want Dell stock face bigger risks under Icahn’s plan. While they would receive $12 a share, there’s no guarantee that they’ll be able to find a buyer willing to pay $1.65 or more for their existing holdings -- a prospect that may make the Silver Lake-Dell bid more alluring.

Icahn and Southeastern said last week their proposal gives investors a chance to benefit from potential future growth.

“Mathematically, there is no question it is superior,” Icahn said in an interview on Bloomberg Television last week. “You have a choice of getting $12 and still owning Dell, which has great potential.”

Cash Certainty

Even so, Jefferies Group LLC, the investment bank that Icahn said may commit $1.6 billion to help finance his takeover, told clients in a research report that Dell’s investors are more likely to favor a competing offer.

“Most shareholders would prefer the certainty of $13.65 in cash” from Michael Dell and Silver Lake, Peter Misek, an analyst at New York-based Jefferies, wrote in a note today. Investors may accept that rather “than risk the uncertainty and the ensuing stock volatility if the Silver Lake proposal were voted down and Icahn/Southeastern attempt to install a new board of directors.”

Richard Khaleel, a spokesman for New York-based Jefferies, declined to comment on whether the firm has committed funding or on the analyst note.

Owning Dell hasn’t been such an attractive option for shareholders in recent years. The shares were trading above $30 in 2007 after Michael Dell returned as CEO following a hiatus, yet they have been sinking amid plummeting demand for PCs and accelerating competition for selling the data-center products and services Dell has opened its coffers to acquire.

Lackluster Growth

Dell’s board is predicting another year of lackluster growth as demand for PC ebbs, underscoring the urgency behind the company’s decision to be taken private, documents filed in March showed.

Sales for the year ending next January will slip to $56.5 billion, and Dell’s PC business will shrink by $10 billion over four years, according to projections in a proxy statement filed with regulators.

“I think Icahn is gesticulating in order to push Dell/Silver Lake to bump so that he can get out break-even or with a small profit,” said Albert Saporta, managing director at at AIM&R, an investment research firm based in Geneva. “It should be pretty clear by now that Dell is not worth a lot more than $13.65.”

To contact the reporters on this story: Lisa Rapaport in New York at; Aaron Ricadela in San Francisco at

To contact the editors responsible for this story: Tom Giles at; Cecile Daurat 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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Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.