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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 the Dell SEC disclosure of the settlement that had been reported by Icahn, see

A version of the article below was also published in Bloomberg Businessweek with the caption "Carl Icahn Withdraws His Appraisal Request for Dell Stake."


Source: Bloomberg Businessweek, October 4, 2013 article  |

Bloomberg Businessweek

News From Bloomberg



Bloomberg News
Icahn Withdraws Appraisal Request for $2 Billion Dell Stake

By Miles Weiss | October 04, 2013 

Carl Icahn walked away from his effort to win a higher price for an 8.9 percent stake in Dell Inc. (DELL:US) less than a month after stating that the $24.9 billion buyout “greatly undervalues” the computer maker.

In a post today on Twitter, Icahn said he was dropping his demand for an independent court appraisal of his 156.5 million Dell shares. Under the law in Delaware, where Dell is incorporated, stockholders can ask the state chancery court for an independent valuation of fair value in a takeover.

The billionaire, in a Sept. 9 letter to other Dell shareholders (DELL:US), vowed to pursue appraisal rights even as he conceded defeat after a months-long effort to spur a higher bid or win control of the Round Rock, Texas, company. Today’s reversal shows how Icahn’s shareholder activism is often designed to generate short-term gains, said Gary Lutin, a former investment banker who is setting up a trust for investors who seek Dell appraisal rights.

“This is what Icahn has always been good at,” said Lutin, who runs the Shareholder Forum, the New York-based sponsor of the Dell Valuation Trust. “Yelling and shaking and grabbing what he can.”

Icahn, who didn’t return a telephone call seeking comment, said in the September letter that his efforts had forced Michael Dell and partner Silver Lake Management LLC to boost their bid to $13.75 a share, plus a 13 cent dividend, from the $13.65 a share they originally offered in February. Abandoning the appraisal demand clears the way for Icahn to collect the $2.2 billion he is entitled to receive under the buyout’s revised terms.

‘Better Uses’

“I withdrew my demand for appraisal of my Dell shares,” Icahn said in his Twitter post. “Based on our returns on capital, we believe we have better uses for $2 billion.”

To pursue a claim under Delaware law, an investor needs to file an appraisal demand with the target before the shareholder vote, then oppose the deal or refrain from casting a ballot. Once the deal closes, investors who have filed demands have 60 days to change their minds and accept the price being paid in the buyout. Dell shareholders approved the buyout on Sept. 12, and the company has said it expects to complete the transaction by Oct. 31.

Other Investors

Dell received appraisal requests for 225 million shares, including Icahn’s, said a person familiar with the matter, who asked not to be identified because the information hasn’t been made public. That suggests that investors (DELL:US) holding an additional 68.5 million Dell shares passed up the $942 million they would have received through the buyout to pursue a court valuation for their stock holdings.

The investors must file a petition with the Delaware Chancery Court seeking an appraisal within 120 days after the deal becomes final. Absent a settlement, they would receive whatever the court decides Dell shares were worth when the buyout was completed, plus interest of almost 6 percent.

Dell filed a Form 8-K with the U.S. Securities and Exchange Commission today saying that Icahn notified the company yesterday that his affiliates withdrew their appraisal demands.

“We are going to proceed accordingly with the rest of the process, including closing” the buyout later this month “and then with whatever litigation occurs down the road,” David Frink, a Dell spokesman, said today in an interview.

To contact the reporter on this story: Miles Weiss in Washington at 

©2013 Bloomberg L.P. All Rights Reserved. Made in NYC

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.