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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:

Discovery that lead petitioner in "dissenter" rights for Dell appraisal voted in favor of transaction


Source: USA Today, May 3, 2015


Money manager hits awkward snag in Dell buyout case

Kaja Whitehouse, USAToday    12 p.m. EDT May 3, 2015


(Photo: Paul Sakuma, AP)


Despite publicly opposing Michael Dell's bid to take the computer company he founded private, mutual fund giant T. Rowe Price supported the transaction in the voting booth, according to an analysis of the mutual fund giant's voting records by USA TODAY.

T. Rowe's regulatory filings show that the money manager, which is opposing the Dell deal in Delaware court, voted "for" the 2013 buyout across its funds, including the Equity Income Fund, which owned 16.5 million Dell shares, the Science & Technology Fund, which owned seven million shares, the Balanced Fund and the Equity Index 500 Fund.

T. Rowe Price's support for the $25 billion transaction contradicts statements it made leading up to the controversial deal, and afterward in Delaware court, where it has been seeking more than the $13.75 a share paid to stock owners, in cash.

"We are aware of a discrepancy in the communication of our voting instruction on the Dell buyout," the mutual fund company said in a statement. "T. Rowe Price has always opposed the Dell buyout and has made that opposition well known. We view the discrepancy as irrelevant for purposes of our ability to pursue appraisal," T. Rowe said, referring to its efforts to obtain more through legal channels. "Our goal remains to secure fair value from this deal for our clients."

Dell officials declined to say when the company discovered the discrepancy, but mutual funds are required to release their voting records in bulk once a year.

Experts say the "for" vote could upend T. Rowe's case for more money.

“You give up your right to complain when you vote 'For' the transaction”

Lawrence Rolnick


Under Delaware law, shareholders may ask a judge to place a value on corporate transactions they deem unfair. But to do this, they cannot also vote "for" the transaction, said Lawrence Rolnick, a securities lawyer with Lowenstein Sandler. "You give up your right to complain when you vote 'for' the transaction," Rolnick said.

John Latham, Dell's lawyer in the Delaware Chancery Court case, declined to comment. The next hearing is scheduled for May 11.

Dell's initial offer to pay $13.65 a share was met with objections from a who's who of Wall Street heavyweights, including billionaire Carl Icahn, Pzena Investment Management and Southeastern Asset Management Inc., which was Dell's largest outside shareholder with an 8.4% stake.

T. Rowe Price joined the chorus as Dell's third largest shareholder with a 4.4% stake. "We do not intend to support the offer as put forward," T. Rowe chairman and chief investment officer, Brian Rogers, said in February 2013.

After a sweetened deal was approved, T. Rowe joined a group of investors holding 47.5 million shares who demanded a judge take a second look. T. Rowe was the largest shareholder to reserve its rights to a court appraisal, with more than 30 million Dell shares.

“Our goal remains to secure fair value from this deal for our clients.”

T. Rowe Price


T. Rowe Price's lawyer, Stuart Grant, cited case law allowing shareholders seeking court appraisal to rely on the votes of the entity that processed the stock on behalf of shareholders, or Cede & Co., a unit of Depository Trust Company.

"I think the case law is rock solid and the only thing that counts is how the record holder votes its shared," Grant said in an interview. "To me it is cut-and-dried that all of the stock holders who sought appraisal will be entitled to appraisal."

But some experts say this option is not available for shareholders who voted "for" a transaction, even if they did so by mistake.

"That case was about what do you do if there's no evidence for how they voted. That's different," said Lawrence Hamermesh, professor of corporate and business law at Widener University.


© 2015 USATODAY, a division of Gannett Satellite Information Network, Inc.


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.