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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 reports of the media speculation about the intentions of Icahn referenced in the article below, and about Icahn's potentially competing interests in fund marketing, see


Source: Wall Street Journal | All Things Digital, June 16, 2013 article

Arik Hesseldahl

Arik Hesseldahl

ethics statement  |   bio

With a Month to Go Before Dell’s Buyout Vote, Eyes on Proxy Advisory Firms

June 16, 2013 at 1:21 pm PT




The proxy vote over the $24.4 billion plan to take the struggling computer company Dell private is now only 32 days away.

Set for July 18, it may yet be close, or it may not. Much of that will be determined by the activist investor Carl Icahn walks away from the proxy fight he started as he has been reported to be considering.

But another key step in that process is fast approaching. The two major proxy firms, Institutional Shareholder Services and Glass Lewis have yet to weigh in on the proposal my CEO Michael Dell and the private equity firm Silver Lake Partners. The opinions of those firms will carry a lot of weight among certain institutional shareholders. A recommendation against the buyout by either firm – ISS in particular — could sway enough shareholders that its approval might be in doubt.

As yet neither firm has given any indication as to its opinion of the deal. CNBC reported Friday that meetings between representatives for Dell and Silver Lake and the proxy firms had not yet taken place.

The proxy firm recommendations matter in part because of the way the proxy vote will be structured. Under terms of the buyout process established by a special committee of Dell’s board of directors, neither Michael Dell, nor any of his affiliates who control a combined 15 percent and change of the outstanding shares can cast a vote. That means a majority of slightly more than 42 percent have to vote in favor.

Those against the deal so far include Icahn and Southeastern who control a combined 12.53 percent of the company’s shares. Others who have previously expressed opposition to the deal include fund manager T. Rowe Price, which had 4.09 percent of Dell shares as of March 31 and Pzena Investment Management and Yacktman Asset Management, who control a combined 1.58 percent of shares.

One critical block of shares belong to investment funds that are passively managed, including some index funds and exchange traded funds (ETFs). According to data from Thomson Reuters, more than 16 percent of Dell shares are in the hand of index funds. In some cases these funds vote exactly as the proxy firms recommend.

According to a source close to the process, as much as 10 percent of Dell shares are in the hands of firms that have so-called “auto pilot” proxy policies and vote with the advisory firms. Another five percent to 10 percent will be heavily influence by the firms’ opinions.

The largest of these include State Street Global Advisors, which had 3.46 percent of Dell’s shares, and which gets some advice from ISS. Invesco’s PowerShares funds unit get its advice from Glass Lewis.

Other firms keep their own counsel on proxy votes and vote according to their own proxy policies. The Vanguard Group (proxy guidelines here) and the iShares funds controlled by the investment firm BlackRock (proxy guidelines here) are two of the the largest in this camp: Vanguard owns 3.7 percent of Dell shares while BlackRock’s funds control about 3 percent.

In looking over all this I prepared a handful of spreadsheets. I’ll share screen grabs of two.

The first is breakdown of the top 21 shareholders of Dell (Michael Dell, plus the next 20). Those who have previously indicated opposition to the buyout in public statements are highlighted in red. Remember that about 42 percent of shareholders need to vote in favor for the buyout to be approved. (Most of these investment stakes were current as of March 31, based on public filings, and so they don’t account for any changes that might have occurred since then.)


The second is the top 10 index fund companies that hold Dell shares.



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.

Inquiries about this project and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

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.