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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:

Henry Blodgett interviews Michael Dell at Davos about intrinsic value of company he bought from public shareholders


Source: Business Insider, January 23, 2015 interview




EXCLUSIVE WITH MICHAEL DELL: It's Awesome To Be Private, PCs Aren't Dead, And Chromebooks Won't Take Over The World

Henry Blodget

Jan. 23, 2015, 5:49 AM



REUTERS  Michael Dell.


We caught up with Dell CEO Michael Dell on Friday morning at the World Economic Forum in Davos. 

We had heard from one of Dell's investors a few days ago that the company was thriving as a private company. Mr. Dell enthusiastically confirmed that.

Dell says the Dell team is energized, reinvigorated, and aligned. He says it is a great relief to be private after 25 years as a public company. PCs aren't dead, he says, and Windows 10 looks cool. Dell's debt is getting upgraded as analysts realize the company isn't toast. Dell's software, server, and services business are growing in double digits. And, no, Google's Chromebooks aren't going to take over the world.


* It is a wonderful relief to be private after 25 years as a public company. The administrative hassles and costs are much less, and you have far greater flexibility. You don't have to react to daily volatility and repricing, and there's less distraction, so you can focus on your business and team.

* Dell went public because the company needed capital — but these days plenty of capital is available in the private market. Dell went public in 1988, when Michael Dell was 23. Over the next 25 years, the stock produced fantastic returns. But the one-two punch of the financial crisis and concerns about the "death of the PC" poleaxed Dell's stock and caused many people to write the company off for dead. Dell thought it would be easier to retool the company in the relative quiet of the private market, and he found investors willing to provide all the capital he needed. He understands why red-hot emerging tech companies like Uber, Palantir, Facebook, and Twitter don't go public until they are very mature — they can raise all the capital they need in the private market. There's no reason to subject yourself to the headaches of the public market if you don't have to.

* Dell's new management team is energized and aligned around the new mission — serving mid-market growth companies with comprehensive hardware, software, and services solutions.  Some of Dell's old managers did not want to sign up for another tour of duty, Dell says. After going private, Dell replaced these folks with younger, hungrier executives who were excited to take on their bosses' responsibilities. 

* Dell's debt, which some doomsayers thought would swamp the company, is now getting upgraded, as analysts realize Dell's future is much brighter than they thought. S&P, for example, recently raised its rating on Dell's debt to just a notch below "investment grade."

* It turns out the PC isn't dead. There are 1.8 billion of them out there, Dell says, and a big percentage of them are more than four years old. Dell's PC business got a bump from the retirement of Windows XP last year. Dell expects there will be another bump from the launch of Microsoft's next version of Windows, Windows 10.

* Windows 10 looks good so far. Microsoft's most recent version of Windows, Windows 8, was a dud. No one wanted to buy a PC to get it. (In fact, many people and companies chose to avoid getting new PCs to avoid it.) Windows 10, in contrast, looks like a positive step. It will most likely cause many older PC owners to upgrade, driving some growth in the PC market.

* Dell isn't just PCs anymore! The company's server, software, and services businesses are doing well, Dell says. Server growth is up double-digits year over year. 

* Google's ChromeBooks — cheap, stripped-down computers that don't run Windows — are popular in some segments of the market, but they're not going to take over the world. Dell sells some ChromeBooks. They're doing well in some market segments, like education. But Michael Dell thinks they may end up looking like the netbook market of a few years ago. They sound great, at first, especially for the low price of $249. But then many buyers find that they don't do what they want or expect them to do.

* Copyright © 2015 Business Insider Inc.


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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