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.


Forum distribution:

Dell presents facts and issues for dismissal of appraisal rights for shares voted in favor of buyout


For Dell's statement of the facts and issues, attributing the voting actions to T Rowe Price rather than to its administrative agents as suggested in the article below, see the following public version of the 47 page brief and supporting legal references:


Source: Law360, August 7, 2015 article

Dell Takes Aim At Muddled Vote In Shareholder Appraisal Fight

By Peter Hall

Law360, Wilmington (August 7, 2015, 9:36 PM ET) -- Dell Inc. urged the Delaware Chancery to throw out petitions seeking appraisal of its stock, saying it's now clear that although several of its largest investors publicly opposed the computer maker's $25 billion go-private deal, they’re barred from seeking an adjustment because their stockholder of record voted in its favor.

In a brief supporting its summary judgment motion made public Thursday, Dell says discovery has revealed that although T. Rowe Price Associates Inc. directed its funds to vote their shares against the 2013 merger, an intermediary's proxy system contained incorrect instructions.

As a result, the funds' record stockholder, Cede & Co., through a chain of proxies, actually voted the shares in favor of Dell founder Michael Dell's buyout, the company says in the heavily redacted brief, which was first filed under seal July 30.

Although 13 mutual funds involved in the transaction reported the vote as required by federal securities regulations, T. Rowe Price did not discover the voting issue for more than a year after the fact, Dell's brief says.

Dell says it has learned through discovery and interrogatories that in late 2014, T. Rowe Price and proxy advisory firm Institutional Shareholder Services conducted an investigation that revealed within a few days the T. Rowe funds' shares had been voted for the merger.

“These facts make clear that the subject petitioners' assertion that it is 'not possible to know how the record holder actually voted the specific shares attributed to any specific individual beneficial owners of Dell shares,' is incorrect,” the Dell brief says.

If Dell succeeds in having T. Rowe Price’s appraisal demand tossed over the issue, it would eliminate one of the largest shareholders challenging the price of the deal, which is set to go before the Chancery Court for a fact trial in October.

Dell argues the fact that the record holder of the funds' shares voted in favor of the buyout deal disqualifies them from seeking an appraisal under Delaware law.

“A dissenting stockholder's failure to comply strictly with the technical requirements of the appraisal statute — such as the requirement that the stockholder not vote in favor of the transaction — are not excusable, irrespective of the equities,” Dell argues.

The brief also argues that the petitioners cannot rely as a remedy on votes against the merger cast by the same intermediary, Broadridge Financial Solutions, on behalf of other clients. Dell notes the Delaware Supreme Court has rejected the notion that shares held by a single broker on behalf of multiple clients are fungible.

And Dell argues that the petitioners cannot claim the inadvertent votes were the result of Dell's proxy language or negligence on the part of ISS.

The appraisal action was first lodged in October 2013 by Cavan Partners — which held 100 shares, according to court records — and the case was eventually consolidated with dozens of other shareholders claims.

A majority of Dell shareholders approved the buyout a month earlier, after then-Chancellor Leo E. Strine Jr. upheld last-minute tweaks by Dell's board to voting rules and record date, dousing a stiff and well-publicized opposition campaign.

T. Rowe Price counsel Stuart M. Grant declined to comment on the filing Friday.

The asset managers are represented by Stuart M. Grant, Michael J. Barry, Christine M. Mackintosh, Jennifer A. Williams and Rebecca A. Musarra of Grant & Eisenhofer PA.

Dell is represented by Gregory P. Williams, John D. Hendershot, Susan M. Hannigan and Andrew J. Peach of Richards Layton & Finger PA and John L. Latham, Susan E. Hurd, Gidon M. Caine and  Charles W. Cox of Alston & Bird LLP.

The case is In re: Appraisal of Dell Inc., case number 9322, in the Court of Chancery of the State of Delaware.

--Editing by Kelly Duncan.


© 2015, Portfolio Media, 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.

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.