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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:

Analyst speculation about Dell private equity investor comments on realizing intrinsic value


For previous reports of the valuation comments by Dell's director and private equity investor, and the video of his full interview, see


Source: Austin American-Statesman, July 20, 2015 article


American-Statesman staff

Could Dell Inc. spinoff talk become reality?

3:24 p.m. Monday, July 20, 2015

Michael Dell teamed with Silver Lake Partners in 2013 deal.



Did director foretell change or is he trying to generate cash flow?

Is Dell Inc. really thinking about spinning off or combining some of its business units — or are a major shareholder’s comments suggesting that possibility really aimed at luring some dividend payments out of the technology giant?

That was the question industry analysts were pondering after Egon Durban, who sits on Dell Inc.’s board of directors, suggested that there are parts of the business that could be spun off or combined.

Durban is managing partner of Menlo Park, Calif.-based Silver Lake Partners, the venture capital firm that teamed with Dell Inc. founder and CEO Michael Dell on the $25 billion deal to take the company private in 2013. Silver Lake Partners owns a 25 percent equity stake in Dell Inc., with Michael Dell controlling 75 percent.

Speaking at Fortune magazine’s Brainstorm Tech conference last week, Durban said Dell Inc. is considering the possibility of spinning off or combining two business units: Secure-Works, a cybersecurity business acquired in 2011 for $612 million, and Boomi, a cloud integration software platform acquired in 2010 for an undisclosed amount.

Dell Inc. has grown into a global organization with more than 100,000 employees, and has about 14,000 workers in Central Texas, where it is the area’s largest private employer.

Durban said that Dell Inc. was not “committed at this stage” to doing any spinoffs or combinations. He also said that Silver Lake’s equity in Dell Inc. has increased in value since the buyout closed.

In a written statement, Dell Inc. spokesman David Frink said: “Dell is focused on delivering technology solutions that work harder for our customers and helps them succeed. We have our strongest-ever product and services portfolio and have acquired significant new skills and capabilities over the past several years. We won’t have additional comment on Mr. Durban’s remarks.”

Meanwhile, technology industry analysts were divided Monday on whether Durban’s comments were a sign that Dell Inc. will, in fact, look to spin off part of its business, or whether Durban’s intent was to generate some cash flow for his firm.

Patrick Moorhead, an analyst at Moor Insights & Strategies, said that if he were to take what Durbin “said on stage literally, it does appear that Dell is looking for creative ways to ‘unlock’ the value and that could mean a potential spinout or sale of high value assets.”

“The interesting thing will be to see if what we take on stage at face value, how Dell maintains the same end-to-end enterprise value proposition if its competitors can get access to Secure-Works and Boomi. Michael Dell is a brilliant guy and I’m sure whatever he does is monetarily advantageous,” Moorhead said.

However, analyst Roger Kay with Endpoint Technologies Associates said Durban’s comments could also be him looking to speed up the return on his company’s investment.

Silver Lake is “itching to get something for their involvement” in the Dell Inc. buyout deal, Kay said.

Durban’s comments “point to the dynamics of the relationship with Silver Lake ... a company whose only business is to make money with money, and they come into a deal where liquidity hasn’t been completely obvious,” Kay said. “So it doesn’t surprise me that Silver Lake would float the idea in public. The concept is, here’s a way to win some liquidity for them.”

Moorhead said if that is the case it “would also indicate that Durban, Silver Lake and Dell are misaligned. For Dell to have an end-to-end play, they need an end-to-end offering. I will reinforce there are creative ways to do that even if assets are spun out.”

Kay, meanwhile, said he thinks the odds of a spinoff deal happening “are really low.”

“If there was really this unlocked value potential that was spilling over the dam,” Kay said, “then Michael Dell would be aware of that.”


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

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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.