Forum Home Page see Broadridge note below]

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 presentation referenced in the report below, see


Source: Bloomberg, June 27, 2013 article




Dell CEO May Get 50% Return on Buyout, Investor Says


Dell Inc. (DELL) Chief Executive Officer Michael Dell may generate an annualized return of more than 50 percent on his investment if he succeeds in taking the computer maker private, an investor opposed to the deal said.

The CEO could realize an annualized return of as much as 50.1 percent during the next four to five years and Silver Lake Management LLC, his partner, could earn as much as 44.7 percent annually over the same period, Southeastern Asset Management Inc. said in a presentation filed with the Securities and Exchange Commission.

Those rates of return are higher than shareholders could achieve under the terms of the leveraged buyout, whereby Dell and Silver Lake have agreed to pay stockholders $13.65 a share, Southeastern said in the presentation. The investment firm held about 4.1 percent of Dell stock, as of June 18, according to Bloomberg data.

Southeastern, which previously said Dell is worth $24 a share, may have locked in a loss of $225 million after recently selling 71.7 million Dell shares at $13.52 apiece to fellow dissident billionaire Carl Icahn. It had paid $2.4 billion to acquire 146.1 million shares, according to earlier regulatory filings, indicating its cost was about $16.66 a share.

Buyout Vote

“The board could have done more -- much more -- to afford stockholders an opportunity to achieve the very same gains now pursued by Michael Dell and Silver Lake,” the Memphis, Tennessee-based firm, run by O. Mason Hawkins and Staley Cates, said nonetheless.

Southeastern is teaming with Icahn to oppose Michael Dell and Silver Lake’s $24.4 billion buyout ahead of a vote at a special meeting set for July 18 at Dell’s Round Rock, Texas headquarters. Icahn, in his third push to seek a bigger payout for shareholders, is proposing a deal that asks Dell to tender 1.1 billion shares at $14 apiece and which would retain the company’s public listing.

In March, Icahn offered $15 a share in cash for as much as 58.1 percent of the stock. Then, in May, he partnered with Southeastern to offer investors $12 a share in cash or additional Dell stock while letting them retain stakes in a public company. All his offers so far weren’t fully financed and Dell’s special committee of the board has urged shareholders to vote for founder Michael Dell’s buyout at the July 18 meeting.

“Substantially Undervalued"

Icahn and Southeastern view Dell’s buyout offer as being at a ‘‘substantially undervalued’’ price, the investor said in the presentation. Hawkins made similar arguments in a letter to Dell shareholders filed with the SEC yesterday.

Evercore Partners Inc. (EVR), the advisory firm hired by Dell, estimated the investment returns for Michael Dell and Silver Lake, based on projections by Boston Consulting Group Inc., Southeastern said. Dell plans to invest his 15.6 percent stake in the company and an additional $750 million in cash to take the company private.

Dell and Silver Lake’s offer represents a premium of 25 percent over the computer maker’s closing share price of $10.88 on Jan. 11, the last trading day before news of a deal was first reported.

A spokesman for the special committee of Dell’s board handling the merger agreement declined to comment.

Dell slipped less than 1 percent to $13.34 at the close in New York. The stock has gained 32 percent this year through today compared with a 13 percent gain for the Standard & Poor’s 500 Index.

To contact the reporters on this story: Aaron Ricadela in San Francisco at

To contact the editor responsible for this story: Pui-Wing Tam 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.

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.