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 press release referenced in the article below and a subsequent one on the same subject, see

An earlier 12:40pm version of this article had been distributed to Forum participants.


Source: The Wall Street Journal, July 10, 2013 article


TECHNOLOGY  |  Updated July 10, 2013, 3:02 p.m. ET

Icahn Calls on Dell Holders to Seek Appraisal of Shares

Activist Investor Says PC Maker Might Be Forced to Pay Premium to Buyout Price




Carl Icahn on Wednesday urged Dell Inc. shareholders to head to court to force founder Michael Dell to pay more, in the activist investor's latest effort to ruffle a buyout slated for a shareholder vote next week.

The billionaire investor has taken up the mantle of getting a Delaware judge to appraise the value of Dell, a ruling that could lead to those who join him getting more than the $13.65-a-share buyout—or possibly less. The decision to seek an appraisal suggests Mr. Icahn is resigning himself to the possibility shareholders vote in favor of the buyout next week, as his plan would only affect shareholders if the deal passes.

At the same time, because a shareholder has to vote against the deal to seek an appraisal, if enough shareholders attempt the maneuver it could block the deal.

In Delaware, a shareholder is allowed to seek a judge's opinion on what the long-term intrinsic value of a company is, instead of outright accepting a merger offer. If a judge were to determine that Dell shares are worth more than $13.65, the buyout group would be forced to deliver the extra amount, with interest, to those shareholders who sought the appraisal.

The shareholders also take the risk that a judge could rule the shares are worth less, and they would also have to wait the time it takes a judge to decide—potentially years. Also, owning appraisal rights could potentially be an issue for some institutional shareholders who have strict rules about holding only public shares.

Appraisal cases that make it to a judge's rule are rare, with only a few each year, people in the industry said.

Mr. Icahn's plea to shareholders says "those who seek appraisal may get lucky" and presents the move as a can't-lose option because shareholders can withdraw their request up to 60 days after the merger and still get the $13.65-a-share buyout price.

"We believe if you seek appraisal, you will receive more," the letter says.

"As I said all along, I believe it's worth well more than $13.65" a share, Mr. Icahn said in an interview Wednesday. "It looks like it's going to be a very close vote, but if Dell wins, going for appraisal rights is a no-brainer."

Mr. Icahn, Dell's second-largest shareholder behind Mr. Dell, has repeatedly criticized the bid by Mr. Dell and private-equity firm Silver Lake Partners to take Dell private for $24.4 billion, saying the proposal undervalued Dell's shares with its $13.65-a-share price tag.

Mr. Icahn revealed a position in Dell after the buyout agreement was announced Feb. 5. In a recent filing, Mr. Icahn estimated his firm spent about $2 billion acquiring the position in Dell, which would mean an average of $13.12 a share. Part of his stake is in options, which makes his final cost unclear.

Dell shares lost 3 cents to close at $13.33 in 4 p.m. trading in New York Wednesday.

Shareholder-advisory group Institutional Shareholder Services Inc., as well as Glass, Lewis & Co. and Egan-Jones Proxy Services, this week recommended Dell stockholders vote for the buyout offer, improving the odds of the deal passing.

In his latest letter to shareholders, Mr. Icahn says he would seek to settle the appraisal with Mr. Dell and Silver Lake—who have their own risk in any court proceeding—within the 60-day grace period, a situation he says may allow a shareholder to "have your cake and eat it too."

One possible point in his favor: Often, deal agreements include a clause that allows buyers to back out of a deal if too many shareholders seek an appraisal. However, there is no such clause in the Dell agreement, which means the buyout group assumed the risk of such an occurrence.

Gary Lutin and the Shareholder Forum, a shareholder-advisory group, set up a public trust earlier this year that would support Dell investors seeking appraisal rights and said Wednesday that at least reserving an appraisal right seems to be an obvious step to many in the forum.

"Fair-market value is almost always more than auction price, especially in a situation like Dell in which you have very sophisticated private-equity firms who are unlikely to pay more for a company than its professionally determined long-term going concern value," Mr. Lutin said.

—Shira Ovide contributed to this article.

Write to David Benoit at and Ben Fox Rubin at

A version of this article appeared July 11, 2013, on page B4 in the U.S. edition of The Wall Street Journal, with the headline: Icahn Maneuvers For Dell Appraisal.

Copyright ©2013 Dow Jones & Company, Inc. All Rights Reserved


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.