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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:

Dell presents more details of growth started before buyout of minority shareholders


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


Source: The New York Times, November 2, 2014 article


Dell’s Life After Wall Street


On Tuesday, Michael Dell will present his company’s plan for its shareholder-free future.

Credit Damon Winter/The New York Times

A year after spending $24.9 billion taking his computer company private, Michael S. Dell is gleeful to have his namesake firm to himself. And to be done with Wall Street.

“This morning on the treadmill I was watching Bloomberg and CNBC, all the circus clowns,” Mr. Dell said in a recent interview. His disdain for investment advice as entertainment is obvious — so obvious that no one should have been surprised that to get away from Wall Street’s influence, Mr. Dell endured a monthslong, often personal campaign for a higher shareholder buyout price by the corporate raider Carl C. Icahn.

On Tuesday, Mr. Dell will show what he has been up to since the seven-month struggle with Mr. Icahn ended last year. At a coming-out party in Austin, Tex., for the new Dell, Mr. Dell will try to persuade people that his company is about far more than the personal computers and computer servers it has been known for, with products intended for things as varied as the cloud computing networks of global enterprises and handy personal devices.

Mr. Dell, who founded his company at 18, says its current expansion beyond its core business, personal computers, began six years ago.

Credit Tony Avelar/Associated Press Images for Dell



It is a transformation Mr. Dell says he actually started six years ago, spending $18 billion on 40 acquisitions, infuriating investors like Mr. Icahn and confounding industry analysts along the way.

In a conference room high above Columbus Circle in Manhattan, Mr. Dell recently provided the first extensive look inside his new plans for his company, explaining the many pieces that add up to a new Dell and reflecting on his tussle with Mr. Icahn, whom he calls “the great Icahn,” in tones sarcastic even for a wealthy Texan. It is clear the fight has not been forgotten.

When Mr. Dell first proposed taking his company private, Dell was handicapped by declining computer prices and backbreaking failure to get into hot markets like mobile computing. The only way to fix it, Mr. Dell argued, was to buy out investors and go private so he could stop worrying about profit for a few quarters and remake the business.

The biggest roadblock was Mr. Icahn’s demand for a higher price for his shares. After many shareholder votes and court challenges, Mr. Dell and his partners at the private equity firm Silver Lake raised their offer by a few pennies. But Mr. Icahn did not exactly bless the transaction.

“I intend to call him to wish him good luck (he may need it),” Mr. Icahn wrote in a letter to shareholders as he gave up the fight. A call to Mr. Icahn was not returned.

Mr. Dell founded the company when he was just 18, assembling and selling personal computers from his college dorm, and he took it public at 23. Now, at 49, he wears a pinstripe suit but no tie, has some gray at the temples and rises excitedly to draw elementary diagrams that forecast his profitability and the competition’s demise. You can own 75 percent of the world’s third-biggest PC company, it seems, and still delight in simple vindication.

“I think he’s having the time of his life,” said Aaron Levie, co-founder and chief executive of Box, an online data storage and collaboration company, who has known Mr. Dell for two years. “He has control, and a lot of assets that people don’t understand yet.”

Dell has a comprehensive strategy at a time when peers like Hewlett-Packard and IBM are splitting apart and selling bits of themselves.

The new Dell has software, equipment for data storage and computer networking, services and sensors. It is developing software that measures facial expressions, voice tone, even how we individually swipe key cards. There is a device that can make a hotel room’s digital television into a secure corporate computer. A Dell tablet is the world’s thinnest and lightest, the company says, with a four-million-pixel screen and a three-dimensional camera. And, of course, there are lots of new personal computers.

But some things have not changed. Dell is using the same plan in software and services that it used with PCs and servers two decades ago: Come in with a lower-profit-margin, “good enough” version of something like networking, then make the cheap stuff better.

“It works,” Mr. Dell said. “You start out not as good, not as fast, and a year or two later it’s faster and better and you can’t do stuff unless you’re in it.”

The Dell campus in Round Rock, Tex. Credit Ben Sklar for The New York Times

Undercutting the competition on prices is usually effective. But will the big reboot of Dell work? Toni Sacconaghi, a financial analyst for Sanford C. Bernstein, said Dell’s strategy will hold up as long as PCs sell well. Being private, Dell does not have to disclose much about sales and profits, but there are indications that Dell is getting the cash from PCs to finance its transformation.

According to IDC, a tech-industry analysis firm, in the third quarter of this year Dell shipped 10.4 million computers worldwide, a 9.7 percent increase from a year earlier. In the lucrative United States market, Dell’s shipments increased 19.7 percent, to make up 24 percent of the total market for PCs. HP, the top supplier of PCs to the United States, had a 27.7 percent share, but grew 8.3 percent.

PC sales throw off enough cash that in the first half of this year Dell’s buyers paid off $2.4 billion of the $18 billion in debt that they took out to make the purchase. The question is: Can Dell ignite sales enough to become less reliant on the same old business?

For Mr. Dell’s plan to work, his company has to get bigger and become better at alliances. Dell has announced deals with Red Hat, a maker of open-source software, regarding building cloud computing systems. His networking equipment also relies on open source. There is a Dell-Microsoft partnership, to sell Microsoft’s proprietary Azure cloud computing software on Dell boxes.

A deal with Oracle sells Oracle’s powerful database applications on Dell machines to small and midsize companies, long a Dell stronghold. Dell is working with industrial companies like John Deere and Boeing to develop algorithms for precision farming and cloud computing systems for aerospace research. In India, Dell has been putting chips in the ears of cows to better manage livestock.

As a private firm, its deals move faster — exactly what Mr. Dell wanted. Last March, Dell bought Statsoft, a Tulsa, Okla., maker of predictive analytic software. John A. Swainson, the head of software at Dell, said it took two meetings with Mr. Dell lasting a total of two hours and 15 minutes. “In a public company, there would be at least one board meeting about this, maybe two, so that would be two quarters,” he said.

That’s not to say this transition has been easy. Dell had about 110,000 employees when it went private and is now estimated to have around 90,000. It is unclear how many more cuts there will be.

“They need to revive themselves from the inside out,” said Matt Eastwood, an executive director at IDC. “Twenty to 30 percent of the people inside haven’t converted from the old ways. They probably won’t survive.”

Now that Dell is stepping back into the spotlight, Mr. Icahn is not the only one Mr. Dell remembers for kicking his company while it was down. A year ago, HP’s sales force marketed against the confusion caused by Dell going private. In a note to his staff the day after HP announced it would begin the process of splitting in half, Mr. Dell told them to do the same thing to HP.

Even so, his three-quarter stake in Dell is a significant amount of his net worth, estimated at $16 billion by Bloomberg, something that makes Mr. Sacconaghi and others wonder if Mr. Dell will again take his company public at a much higher price.

In another room where numerous Dell devices were on display, Mr. Dell hefted his new tablet, pointed out a curved monitor and obsessed over the 10-hour battery life of a new laptop with a detachable screen. A ruggedized PC for Afghanistan led to a story about a Pentagon general who asked for a “kill” zone, so the machine’s hard drive could be destroyed with a pistol shot during a fast getaway.

What Mr. Dell doesn’t yearn for, he said, is a life under the eyes of Wall Street. “I went public in 1988 because we needed the capital, and we needed to be known.”

And now? “Been there, done that,” he said.

A version of this article appears in print on November 3, 2014, on page B1 of the New York edition with the headline: Dell’s Life After Wall Street.

A version of this article appears in print on November 3, 2014, on page B1 of the New York edition with the headline: Dell’s Life After Wall Street.

© 2014 The New York Times Company


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.

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