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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 similar interview published the previous day and a subsequent report of the buyout group's objective professionals supporting the insider view of Dell's intrinsic value, see

For views reported prior to the shareholder vote accepting the proposed management buyout of Dell, see


Source: Forbes, September 25, 2013 interview


Connie Guglielmo, Forbes Staff

I cover the people and technology driving Silicon Valley

Tech  |  9/25/2013 @ 7:31PM

Michael Dell, Happy About Taking Dell Private, Says The Chase Is On For Customers

Michael Dell is in a pretty good mood.

In his first public appearance since investors backed his $24.9 billion plan to take Dell Inc. private, Dell smiled, laughed and even quipped about the many stories written about the leveraged buyout.

Dell Inc., he told attendees at Oracle’s OpenWorld conference in San Francisco today, will now focus on the long term and on the only audience it needs to please: customers.

“Our success won’t be measured just by short-term results but also by our ability to help our customers succeed five, ten and 20 years from now,” Dell said in an hour-long presentation. “We need to be looking not just at the quarter ahead, but at the decade ahead and investing to create value for customers as long-term relationships with a long-term vision.”

Dell earlier this month won a shareholder battle to take his namesake personal computer maker private along with partner Silver Lake Management, gaining investor support after raising their initial bid by 10 cents to $13.75 a share and offering a 13 cents special dividend to fend off a rival bid from billionaire investor Carl Icahn. Dell, who started the PC maker out of his college dorm in 1984, will own about 75 percent of the company when the deal is finalized sometime around Nov. 1.

I caught up with Dell after his keynote to ask how the company has fared during the leveraged buyout process, which began in February, about why PC sales remain an important part of Dell’s strategy to transform itself into a hardware, software and services company, and what happens next at the Round Rock, Texas-based company.

Q: What has the customer reaction been – you said you’ve gained share during a process that many would have expected to turn off customers?

The customer reaction to Dell going private has been a lot more positive than I would have ever imagined. Customers see it as – ‘You don’t have to be distracted. Now you can totally focus on your business’ So they see it as a positive.

That was absolutely true in the first half of the year. We gained substantial share in x86 servers against all competitors all around the world — universally, every country, every form factor. In PCs, we gained share both year over year and sequentially; we were the only ones to do that. We gained shares in displays and monitors. Our entire enterprise, software, services revenue last quarter grew 9 percent. That compares with other guys who were down 9 percent.

So customers believe in what we’re doing. Yeah, some were distracted, but for the most part no.

And our teams did a great job. They didn’t get distracted. They stayed totally focused on customers…We’re adding more sales capacity to reach more customers and building our channel partnerships, all the kinds of things that we’ll accelerate as we become a private company.

Q: You said it’s a mistake to shorthand Dell as a PC company. What’s the right way to think about Dell?

End to end solutions. We’re focused on and absolutely building Dell as an end to end solutions company. As it relates to PCs, we think PCs are an important part of the end to end solution. But there is kind of a hyper-fascination with [PC sales measured in] units. When you look at actual revenue, our revenue in client devices exceeds that of the companies that sell more units than we do.

Q: You’ve also said you don’t see the death of the PC any time soon, even though PC sales are expected to decline this year.

The obituary for the PC has been written 25 times. The ‘post-PC’ era term was first coined in 1999. And at the time, the PC industry was about 110 million units a year [compared to about 350 million today]. So the post-PC era has actually been better for the PC than the pre-post-PC era (laughs). So what’s the question?

So what you find is that there’s a really long tail in the usage pattern for PCs. Now the PC is evolving – you have virtual, you have tablets. But if you think about computing, there isn’t just one way to compute, just like there’s not just one way to move around. You can have shoes, you can have a car, you can have a bicycle, submarine, rocket, plane, train, glider, whatever. Because you have one doesn’t mean you get rid of another one…But PCs continue to be important.

We’ve built a huge business beyond the PC in this whole enterprise space, which in the last five years grew from $10 billion to more than $21 billion.

Q: Your transformation from a PC company to an end-to-end enterprise provider is something you’ve been working on for five years and we know how it’s played out from a financial perspective, which is that it’s been slow and part of the reason you decided to go private. But what about from a customer perspective? Do most customers know you provide all these services and solutions beyond PCs? Where are you in telling that story?

From my perspective, it’s a story that never ends. Yesterday I was out meeting with a large number of customers here in San Francisco and the Bay Area and we certainly have customers where we’re deeply engaged in running their IT services, modernizing their applications, providing their whole solution set from top to bottom. And then other customers don’t’ really know what it is we do. So our opportunity is to get in front of more customers, continue to build the capabilities of our customer-facing organization to explain what it is we do and continue to grow the business.

Q: If the opportunity is getting the Dell story in front of more customers, how do you see the new capital structure as a private company making that easier for you to do?

If you look at the five things that we talked about in early February, they’re still the same five things. A big part of that is continuing to build out our solutions, expanding our sales capacity and channel partners to reach more customers. We’re absolutely doing that and we’re going to continue to do that.

Again, an interesting perspective, look at the past five years, we’ve more than doubled the size of the enterprise solutions and services business and that may have been overlooked a bit in all this. Now our challenge is to double it again.

If you look at our annual expense for interest it’s less than we were spending before in dividends, share repurchase and interest, and that’s money that we can reapply to research and development, more sales personnel, more partnerships, more innovation, more growth…If you look at the trends in our business in terms of increasing cash flow, increasing deferred revenue, we can accelerate that kind of progress and so we’re investing now for growth later and we have plenty of businesses that have great deferred revenue characteristics. Turning on more aggressive customer acquisition – that’s absolutely what we’re doing.

2013 LLC™

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.

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