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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.



For a subsequently published legal analysis of the valuation standards applicable to appraisal rights addressed in the first section of the report below, see


For a printable copy of this report, click here.

Forum Report: Fair Investor Access (Dell Valuation Project)


Informed Investing in Appraisal Rights

Example of easily exploited confusion

Icahn speculation and simple arithmetic

Investing in appraisal rights, like any other investing, is competitive. You don’t have to be the smartest investor on Wall Street to win, but you do have to be smarter than the average.

And being smarter means being better informed.

Example of easily exploited confusion

Observing what has been reported about supposed expert views of appraisal rights during the past few weeks, being better informed than average should be easy.

An important example is the confused application of court opinions in breach of duty litigation to theories of how judges will determine value in appraisal cases. While some elements of valuation are obviously relevant to both, the standards are essentially different. First, valuation becomes relevant in a breach of duty case only if a plaintiff establishes that a board has failed to perform its duties, justifying court intervention to determine what would have been a fair price. The kind of pricing that is relevant in those circumstances is typically current market bidding. For appraisal cases, it does not matter whether the board has done a good or bad job, since the appraisal remedy is intended for the very different purpose of protecting the rights of a stockholder to realize the long term value of a business when a majority of other shareholders want to sell. Delaware law provides for a judge to make a completely independent appraisal of the “fair value” of the standalone “going concern,” without regard to market bidding. This distinction between auction price and fair value was explicitly established in a 2010 decision of the Delaware Supreme Court that has been referenced repeatedly in Forum reports.[1]

This should help you understand why there have been no cases in the past twenty years in which the Delaware Chancery court has appraised value below a buyout price other than in purchases by third parties and in buyouts of dissident managers.[2] That does not mean the next court decision will follow the pattern, but you can assume that it would be difficult for management insiders backed by professional equity investors to convince a judge that they knowingly offered to pay more than the standalone value of a going concern.[3]

Obviously, from all the media and analyst reports of expected court views of Dell’s auction process, most people do not know the rules for value determination in appraisal cases. If you know them, it will give you a legitimate and well deserved information advantage.

These and other elements of appraisal rights, both Dell-specific and general, will be addressed by members of the “Review Panel” being organized as part of the Dell Valuation Trust to support your information requirements.[4]

Icahn speculation and simple arithmetic

Responding to reports that Icahn representatives have said we are talking, I cannot disclose any information about private communications in the absence of specific permission. I can, however, suggest consideration of the following assumptions based on logic and arithmetic:

  1. Icahn, like any other investor, should make more money, more predictably, from appraisal rights than from winning a series of two proxy fights to reorganize Dell.

  2. Icahn’s investment style, including stated negotiating objectives, would benefit more than most from establishing effective marketability of interests in appraisal rights.

  3. Icahn should also benefit along with other owners of Dell appraisal rights from the effective management and consistent definition of these rights, providing essential support for informed decision-making and eliminating the confusion that results from variations in ownership and decision-making rights, differences in cost and benefit allocations, and discriminatory information access.

  4. Since Icahn has reported perfecting appraisal rights for over 150 million Dell shares, more than all the other announced dissenters combined, everyone should encourage their leadership support of this shared opportunity to realize the fair value of Dell.

I will of course let you know if there are any further developments before Mr. Icahn presents his views at the conclusion of tomorrow’s CNBC “Delivering Alpha” conference, and before Dell votes are counted the following morning.

GL – July 16, 2013

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335




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.