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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.


Forum distribution:

Developing long term enterprise value without former shareholders


For another article and press release about Dell's progress that had not been apparent before the buyout, see


Source: The Wall Street Journal | CIO Journal, October 31, 2014 article


CIO Journal.

October 31, 2014, 4:14 PM ET

Michael Dell Sees Advantage in Rivals’ ‘Chaos and Frustration’


By Clint Boulton


Michael Dell, founder and CEO of Dell Inc., says going private has helped the company accelerate the delivery of new products to market and make strategic investments for customers. What isn’t clear is the extent to which Dell’s new focus on cloud systems, services, and software are resonating with CIOs.

Mr. Dell, in an Oct. 29 LinkedIn post commemorating the first anniversary of Dell’s $24.9 billion buyout, said going private freed up the company to focus on innovation. “We’re investing in our strategy, revving up our innovation engine and having a blast!” said Mr. Dell, who will meet with CIOs at the company’s annual customer event in Austin next week.

Mr. Dell has maintained going private would enable it to accelerate the expansion of its business beyond PCs and enterprise hardware to cloud systems, services and software. IDC market share numbers indicate Dell’s PC business has had seven straight quarters of growth and that its server business, which is ranked second in the market for x86 machines worldwide, remains strong.

More difficult to gauge is the performance of Dell’s cloud systems, which span the company’s enterprise hardware, software and service segments. The company declines to disclose cloud sales figures. But Dell is building private cloud systems with Red Hat Inc. and is reselling public cloud software from Google Inc. and Microsoft Corp. Dell also opened a website where customers can compare and shop for cloud software.

There’s no doubt that the timing of Dell’s decision to go private was propitious. Tech companies such as Hewlett-Packard Co. and eBay Inc. are breaking up, and EMC Corp. is under pressure to do the same, as activist investors demand higher returns. IBM Corp. is selling off its low-end server and chip businesses.  Mr. Dell may be right that the company is making progress in private, although it is hard to have enough information to say for sure, which is of course part of the appeal of being private. Yet even if he is correct, it appears that Dell has some work to do in communicating the value of those efforts to CIOs.

“I feel like Dell is doing the same thing as all of the other providers… except they entered the market fairly late,” said David Chou, CIO of the University of Mississippi Medical Center. Mr. Chou, who is is evaluating similar software from Amazon Web Services, said he isn’t considering Dell’s cloud systems because the company have enough experience running health care software in the cloud.

Dell’s cloud, security and analytics software doesn’t stand out amid products other vendors are selling, said Gerry McCartney, CIO of Purdue University. He is planning to attend Dell’s customer event, where he hopes to learn more about the company’s strategy. “They’ve got to show that they can handle a major transformation.”

Regardless of how well Dell is doing in private, it’s pretty hard to imagine that things would be better for the company if it had remained in the public market.

Mr. Dell said that companies that break up their businesses to satisfy shareholders “create chaos and frustration” for customers. That opens the door for Dell to step in and earn new business, he said. “Every move we make, every dollar spent, every new product and service…they all start and end with what’s best for our customers,” said Mr. Dell.


Copyright ©2014 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.