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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.


Forum distribution:

Reactions to Dell obstructing former investors' rights to appraisal


For a copy of the letter referenced in the article below and a link to a printable version with the court filing, see

Note: Neither Mr. Dell nor any representative of Dell Inc. responded to the referenced letter prior to the August 8, 2014 deadline for the questionable document demand, so that legal counsel for the petitioner was required to file a 17 page objection with the court (here).


Source: Austin Business Journal, July 21, 2014 article

Jul 21, 2014, 10:32am CDT

Dell shareholders push back in buyout share price appraisal case


Nick Simonite/ABJ

Michael Dell speaks to attendees at the Dell World 2013 conference at the Austin Convention Center.


Christopher Calnan

Staff Writer-

Austin Business Journal


A shareholder advocacy group is asking Dell Inc. to withdraw a long list of demands for documentation that they allege could bog down a requested appraisal on the company buyout share price.

The New York-based Shareholder Forum requested that Dell's attorneys withdraw the court filing request for additional documentation, according to a July 14 letter. A minority of more than 100 Dell shareholders are exercising their right for an appraisal rather than accepting the $13.75 share price that CEO Michael Dell and his investor group paid other shareholders during the October 2013 buyout that took the company private.

The process is being managed by J. Travis Laster, a vice chancellor in the Delaware Chancery Court, the New York Times reported Saturday.

Earlier this month, Dell’s lawyers requested from the minority shareholders a massive amount of records covering more than a three-year period — from January 2011 through May. But the Shareholder Forum, an independent moderator founded in 1999 by the New York Society of Security Analysts, has asked Michael Dell to request that his lawyers withdraw the document request.

“I’ve asked Michael Dell to assume responsibility for his company’s respect of investor rights,” Shareholder Forum Chairman Gary Lutin, a former investment banker, said in an interview with Austin Business Journal. “This appears to be intended to impose burdens that would be very significant to a professionally managed fund, which would discourage such shareholders to volunteer themselves as fiduciaries in an appraisal process.”

In response, Dell spokesman David Frink said Sunday that “Dell has served requests for documents on the named plaintiffs that filed suit against Dell. Discovery of this nature is usual in appraisal cases such as this one. Beyond this, we do not intend to comment on the pending litigation.”

Petitioners in the case include Baltimore-based T. Rowe Price Group Inc. (Nasdaq: TROW), once Dell's third-largest shareholder.

Michael Dell initiated the $24.9 billion buyout in February 2013. But he quickly ran into opposition when activist investor Carl Icahn joined forces with another buyout firm, Southeastern Asset Management Inc., in buying up Dell stock and claiming the initial amount offered by Michael Dell, $13.65 per share, undervalued the company. He subsequently upped his offer.

After a large number of shareholders abstained from voting on the buyout, Michael Dell requested the rules be changed so non-votes would not be counted in the final tally instead of counting towards a rejection of his offer.

Andrew Whinston, a University of Texas professor in the Department of Information, Risk, and Operations Management, said it’s likely that Michael Dell will at some point launch an initial public offering again at a higher valuation, creating a windfall for himself and investor Silver Lake Partners.

“That’s his [eventual] goal, to go public at $24 [per share] or $25,” Whinston said. “It’s a big financial gamble.”

Christopher Calnan covers technology, finance and clean energy for the Austin Business Journal.


© 2014 American City Business Journals.

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.