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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 reference:

Dell executives report successful progress of buyout strategy


Source: CNBC, August 4, 2015 article



Dell sees light at end of PC tunnel

Leslie Shaffer | @LeslieShaffer1

Tuesday, 4 Aug 2015

Stefan Zaklin | Getty Images

The PC's fall from popularity helped drive a hard-hit Dell to take itself private, but the computer maker now sees some signs its business there is turning around.

"We're seeing that a lot of the smaller players are leaving, which is giving us a bigger opportunity to go after that market," said Peter Marrs, vice-president of enterprise solutions for Asia-Pacific Japan at Dell. "The market has been declining here in Asia, but we continue to grow faster than the market."

Japan's Sony, India's HCL Infosystems and South Korea's Samsung and LG are among the players leaving the PC business or at least scaling back, he noted.

Sony sold its PC business, VAIO, to investment fund Japan Industrial Partners in 2014, while HCL said in 2013 it would gradually phase out PC manufacturing. Samsung stopped sales of laptops in Europe last year, while LG said early in 2014 it would leave the "traditional PC market."

In 2013, Dell Chairman and CEO Michael Dell secured shareholder approval for his $25 billion offer to buy and take the firm private after a drawn-out battle. The company was once at the top of the PC business, boosted by its pioneering model of allowing customers to order custom-configured PCs online, while working closely with suppliers to keep costs low.

But the company, which was getting most of its revenue from the PC business, ran into sharp headwinds as PC prices fell and its customers' tastes shifted toward tablets and smartphones.

Dell has around 14 percent of global PC market share, ranking third globally in the second quarter of 2015, after HP and Lenovo, according to data from Gartner. But globally, PC sales are still falling, with only around 251 million desktop and laptop units, or around $151 billion worth, expected to be sold this year, down from around 343 million, or around $218 billion, in 2012, Gartner said. Around 31.9 million units, or around $18.2 billion worth, are expected to be sold across emerging and mature Asia and greater China this year, the data show.

The PC business in Asia so far appears to be avoiding one of the pitfalls seen in developed markets: companies encouraging using employees to use their own devices such as personal laptops and smartphones, rather than investing in capex.

"Probably in other parts of the world, you see more of that, but I think here in Asia, we still see the normal deployment of company-owned assets and PCs," Marrs said. "Bringing your own device in, like a laptop, is a security and manageability concern."

But Dell is not putting all of its eggs in the PC basket.

Outside of the PC segment, the company has been seeing a lot of growth, as taking the company private has allowed decisions to be made more quickly, Marrs said, noting the company is hiring 300 sales people in Asia.

"It's almost like we're a startup," he said. "Everything we're doing around making investments is much easier," he added, noting Dell has made around $18 billion worth of new investments in software and hardware companies over the past five years.

Marrs noted the company has seen "double-digit growth" in the server business this quarter, driven by sales related to cloud and other infrastructure. Dell is also focusing on its software and consulting services business.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

Leslie Shaffer

Senior Writer



© 2015 CNBC LLC. All Rights Reserved.

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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.

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