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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:

T. Rowe Price discloses $28 million amount of Dell settlement in SEC report



Source: The Baltimore Sun, July 1, 2016 article


Dell pay-out helps T. Rowe compensate fund investors

By Sarah Gantz · Contact Reporter

The Baltimore Sun

T. Rowe Price Group won't have to dip quite as far into its cash reserves to pay out investors affected by the Baltimore investment firm's embarassing misstep in Dell's 2013 buyout after settling with the computer giant earlier this week.

T. Rowe had opposed the proposed $25 billion Dell buyout for undervaluing the company, but accidentally voted for the deal. The mistake cost the company the ability to join other investors in suing for a higher price and cost its fund investors about $200 million, the amount they would have been eligible to collect through the lawsuit.

Earlier this month T. Rowe said it would pay $194 million into funds that had held the firm's 31 million shares of Dell stock by taking a one-time charge in the second quarter of its 2016 fiscal year.

In documents filed Friday with the U.S. Securities and Exchange Commission, T. Rowe reported it was lowering the amount of its one-time charge to $166 million, after reaching a separate settlement with Dell.

T. Rowe expects the pay-out to reduce net income, after tax, by $100 million, or 39 cents per share.

T. Rowe confirmed Wednesday it had settled with Dell over the buyout, but would not say how much the deal was worth. The regulatory filing indicates Dell paid $28 million.

A Delaware judge ruled in May that Dell founder Michael Dell had underpaid by about $6 billion, but said that because T. Rowe had voted for the deal, though unintentionally, the firm could not collect on the ruling.

The automated system that instructs T. Rowe shareholders how to vote defaults to a "yes" vote. The firm meant to manually change the vote instruction to "no" for the Dell vote, but because of an administrative mix-up, did not.

T. Rowe shares were down 27 cents at $72.70 each in late morning trading.


Copyright © 2016, The Baltimore Sun




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.