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 slide presentation filed by Dell Inc. referenced in the article below, see


Source: The Wall Street Journal, July 6, 2013 article and video


TECHNOLOGY  |  Updated July 6, 2013, 10:27 a.m. ET

Dell Stock Off on Deal Veto Worries



Michael Dell, in 2012, has ruled out raising his offer for the firm.

Days before a key report for Dell Inc. shareholders on whether to accept a buyout offer, company founder Michael Dell signaled the offer won't get any better for investors, sending the stock lower.

Friday's 2.1% drop to $13.03, the lowest level since Mr. Dell's planned $24.4 billion buyout was first announced, came ahead of a key weekend for the controversial deal when at least one influential shareholder advisory firm was expected to issue its recommendation to shareholders.

The stock slide comes five months to the day after Mr. Dell and Silver Lake Partners announced their deal to buy the Round Rock, Texas, company for $13.65 a share. It sets up a cliffhanger ahead of a key recommendation advising institutional shareholders on how to vote.

Since the deal was announced in February, it has been criticized by some of Dell's largest shareholders, seen a private-equity giant propose a higher offer only to back away, and has been the subject of a tireless campaign by activist billionaire Carl Icahn, who wants the deal nixed.


The Dell saga has not taken a holiday. Michael Dell doesn't plan to raise his $13.65 a share bid for the computer maker. David Benoit reports on The News Hub.


Despite the tumult, unless Mr. Dell and Silver Lake make a last-minute move, shareholders will head to their ballot boxes on July 18 faced with the same offer proposed all that time ago: Take $13.65 in cash, or say no and share in the fate of the company and its stock.

The buyout group has faced pressure to boost the bid, and posturing is always a part of deal gamesmanship. But shareholders seemed to indicate Friday they didn't expect any sweetener would emerge to help assure the deal's passage.

Earlier this week, Mr. Dell, who as founder, chairman and chief executive has far longer and deeper ties to Dell and who would control it if it became private, had yet to rule out a price bump the way Silver Lake had, people familiar with the matter said. On Thursday, Mr. Dell talked with Silver Lake representatives, and there was mutual agreement they would stand firm on price, people familiar with the buyout group said.

The buyout group isn't confident it will earn a positive recommendation from proxy-advisory firm Institutional Shareholder Services Inc. and believes a slight bump in price may not be enough to overcome a negative view from ISS, one of the people said.

In any deal negotiation, it is common for suitors to say they won't bump an offer until the last minute even if they are open to doing so. The special committee of Dell's board wasn't informed any such decision had been made, people familiar with the matter said on Friday.

The New York Post earlier reported on Mr. Dell's view.

Meanwhile, Dell's special board committee on Friday released another presentation arguing in favor of the buyout and warning of "downside risk" if shareholders veto Mr. Dell's offer. It said the shares could be worth as little as $5.85 apiece if the year continues on pace with the first quarter's earnings and only as much as $8.67 if an earlier earnings estimate proves true. The figures were based on comparisons to the price-to-earnings ratio accorded rival Hewlett-Packard Co.

The presentation was a response to further questioning from ISS, signaling the buyout group continues to deliver feedback to the adviser.

The board presentation, the news of Mr. Dell's hardened position, and the subsequent stock fall, all can work in the buyout group's favor ahead of the July 18 shareholder vote.

The lower the shares fall, the more difficult it may be for some shareholders to vote no and risk a further drop in the already depressed share price. Buyout proponents also may want to signal to ISS the risk of a stock-price drop should the deal fall apart.

Many big investment firms make their own decisions on how to vote on corporate deals, and are unlikely to be swayed by proxy advisers. Other investment funds rely on the recommendations of the advisers. Corporate ballots sometimes go against the recommendations of proxy firms. In 2011, for example, ISS recommended shareholders reject a sale of J. Crew Group Inc. to a group that included the company's CEO. Shareholders overwhelmingly voted for the deal.

Friday's stock decline suggests investors don't have faith that either Mr. Dell's deal or Mr. Icahn's competing proposal would now succeed. Mr. Icahn's proposal calls for a tender offer of $14 a share for 1.1 billion shares, leaving a portion of the company still trading on the public markets.


The company presentation on Friday criticized a set of estimates that Mr. Icahn uses as "aspirational," and said his valuation "implies unrealistic multiples."

Mr. Icahn said on Friday he believed the buyout group is disingenuous about the health of Dell, and about its own intentions. "I'm tired of their propaganda. If they're going to go away, let them go away," Mr. Icahn said in an interview. He said he welcomes a defeat of the buyout and is committed to pursuing his proposed recapitalization of Dell, borrowing to pay shareholders, if the buyout is defeated.

If passed, the deal would be one of the largest private-equity buyout since the financial crisis. However, the deal has faced opposition since it was first signed, with some shareholders arguing Mr. Dell was borrowing and using the company's cash to keep the company for himself rather than let shareholders participate in the upside he envisions under private ownership.

Mr. Dell has maintained the company's transformation needs to happen outside of the public eye, and that a $13.65 cash offer enables shareholders to avoid the business risks facing the firm.

Write to David Benoit at and Shira Ovide at

A version of this article appeared July 5, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Dell Stock Off on Deal Veto Worries.

Copyright ©2013 Dow Jones & Company, Inc. All Rights Reserved


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.