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.



For the complaint filed by co-lead counsel in the case referenced in the article below, see


Source: Law360, June 21, 2013 article

Strine Rejects Quick Trial For Dell Plaintiffs

By Liz Hoffman


Law360, New York (June 21, 2013, 3:35 PM ET) -- A Delaware judge has rejected a motion for a quick trial in litigation challenging the $24.4 billion buyout of Dell Inc., appearing sympathetic to the argument that buyers Michael Dell and Silver Lake have done everything right so far.

Chancellor Leo E. Strine, Jr. seemed skeptical of plaintiffs' claims that the deal, which is set to go before a shareholder vote July 18, includes protections that would hobble a competing bidder. Rather, he said, the company's board took steps to encourage a higher offer, and suggested the plaintiffs have an uphill battle ahead of them.

“Not only was there a post-signing market check … but there was, in fact, an active look at other potential private equity sponsors,” the chancellor said in a court conference Wednesday. “I do not see any plausible, conceivable basis in which to conclude that it is a colorable possibility that you could deem the choices made by this board to be unreasonable with all the different safeguards."

Nineteen Delaware class actions are challenging the deal, in which Dell's founder and private equity partners are seeking to acquire the company for $13.65 per share. The complaints, consolidated in front of Chancellor Strine, accuse Dell's board of breaching its duties by agreeing to a lowball price and deal protections that discourage a topping offer.

This week, plaintiffs attorney Joe Rice — best known for his role in the landmark $200 billion tobacco settlement in 1998 — filed with the court a letter from investor Carl Icahn, who is trying to thwart the buyout and push an alternative transaction of his own.

In the letter, Icahn said the deal's protections virtually guarantee that no bank would lend to a rival bidder. Icahn's inability to shore up financing has been an impediment to Dell's board seriously considering his proposal, which calls for Dell to borrow some $5 billion and buy back shares or pay a special dividend.

But the chancellor appeared skeptical. The deal's low breakup fee — $180 million if Dell goes with a better offer, or $450 million if the deal is voted down for any other reason — is actually below market norms. And Silver Lake's single matching right is fair, the chancellor said.

“Boards are entitled to give reasonable contractual inducements in their pursuit of high value,” he said. “And as long as there are reasonable attempts to maximize stockholder value, this court is not entitled to intrude.”

And the special committee wrung several concessions out of Michael Dell and Silver Lake, he noted. Among them: Michael Dell's promise to vote his shares in favor of a higher bidder, a go-shop period that allowed Blackstone Group LP and Carl Icahn to conduct due diligence and an offer by Dell to reimburse Blackstone's and Icahn's expenses.

The chancellor also had some harsh words for Icahn, who has not joined the litigation.

Icahn's latest plan, unveiled Tuesday, does not appear to meet the definition of a “superior proposal” under the Silver Lake merger agreement, and the billionaire does not yet have a bank lined up to provide the debt required to fund a $16 billion share buyback. Sources close to Icahn confirm he is working with Jefferies & Co. Inc. to secure as much as $1.6 billion in financing, and Icahn himself has agreed to furnish up to $2 billion.

“We're supposed to gin up expedited proceedings when the bidder … has expressly eschewed pushing further for a superior proposal and is not responding to the special committee's request for information by saying it's in an impossible position to do so,” the chancellor sad, summing up Icahn's position so far as, “I can't give you assurances about [financing], but trust me, the financing is easily available.”

That's the same argument made so far by Dell's special committee, which has pushed Icahn for more details.

The plaintiffs are represented by co-lead counsel at Grant & Eisenhofer PA, Bouchard Margules & Friedlander PA, Bernstein Litowitz Berger & Grossmann LLP, Kessler Topaz Meltzer & Check LLP and Robbins Geller Rudman & Dowd LLP. Barrack Rodos & Bacine and Motley Rice LLC are serving as the executive committee for the plaintiffs.

Dell is represented by Hogan Lovells, with Seitz Ross Aronstam & Moritz LLP and Alston & Bird LLP serving as litigation counsel. Its special committee is represented by Debevoise & Plimpton LLP and Morris Nichols Arsht & Tunnell PA. Its other independent directors are reprsented by Richards Layton & Finger PA.

Michael Dell is represented by Wachtell Lipton Rosen & Katz and Potter Anderson & Corroon LLP. Silver Lake is represented by Simpson Thacher & Bartlett LLP and Young Conaway Stargatt & Taylor LLP.

The case is In re: Dell Shareholder Litigation, number 8329-CS, in Delaware Court of Chancery.

--Editing by Chris Yates.


© Copyright 2013, 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.