Forum Home Page see Broadridge note below]

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:

Dell initiates investigation of "discrepancy" in stated vote relating to dissenter appraisal rights


For the legal arguments of T Rowe Price's counsel reported below in support of some of their accounts challenged for ownership changes, which positions appear to concede the ineligibility of all the T Rowe Price accounts that had voted in favor of the transaction, see footnote #2 of the following report and its link to the relevant legal brief:


Source: Law360, May 11, 2015 article

Dell Wants To Probe T. Rowe Price's Vote In $25B Buyout

By Matt Chiappardi

Law360, Wilmington (May 11, 2015, 8:00 PM ET) -- Dell Inc. told a Delaware Chancery judge Monday it wants to investigate an apparent discrepancy between public opposition and what appears to be the actual voting record of T. Rowe Price Associates Inc. funds, some of the largest stockholders seeking share appraisal in the computer company’s $25 billion go-private deal.

During a hearing in Wilmington, Dell attorney Gregory P. Williams of Richards Layton & Finger PA said the company intends to take discovery connected to how T. Rowe Price’s funds voted for the deal, days after he sent a sealed letter to the court that in a public description stated was “regarding recent factual development potentially affecting the entitlement to the statutory appraisal remedy of certain claimants.”

The text of the letter was not available Monday, but several exhibits are available for public view, and they appear to be records showing T. Rowe Price funds did vote in favor of Dell's $24.9 billion buyout by founder Michael Dell and private equity firm Silver Lake Partners, and a report published last week by USA Today said the asset management firm's regulatory filings showed it voted in favor of the transaction across its funds.

Under Delaware law, shareholders are eligible to seek appraisal of their shares after a merger if they continuously held stock through the deal's closure and neither voted in favor of the transaction nor consented to it in writing.

T. Rowe Price has been a vocal and consistent opponent of the deal, and stated in its appraisal petition with the Chancery Court in February 2014 that its petitioning funds “have not voted in favor of the transaction.” When contacted Monday, a representative for the asset management firm said the apparent discrepancy in positions wasn’t relevant to its push to have its shares appraised, and potentially receive a larger payout from the deal.

“We are aware of a discrepancy in the communication of our voting instruction on the Dell buyout,” a representative said in an emailed 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. Our goal remains to secure fair value from this deal for our clients.”

If Dell were to be successful in seeing T. Rowe Price’s appraisal demand tossed over the issue it would eliminate one of the largest shareholders challenging the price of the deal, which is set to go before the Chancery Court for a fact trial in October.

The appraisal action was first lodged in October 2013 by Cavan Partners — which held 100 shares, according to court records — and the case was eventually consolidated with dozens of other shareholders claims.

A majority of Dell shareholders approved the buyout a month earlier, after then-Chancellor Leo E. Strine Jr. upheld last-minute tweaks by Dell's board to voting rules and record date, dousing a stiff and well-publicized opposition campaign.

Vice Chancellor J. Travis Laster did not make any rulings during the hearing Monday, which was dedicated to the questions of whether some of the appraisal claims — many by retail holders — ought to be thrown out for not being eligible under Delaware law.

One of the arguments focused on a practice where petitioners’ custodial banks would re-register their shares in the name of a different nominee record holder, and Dell said that should disqualify those particular appraisal claims for not meeting the legal requirement of being a continuous shareholder.

But the petitioners countered that the practice is a standard one for custodial banks, done without their knowledge or explicit consent, and their appraisal rights are indeed perfected under Delaware law.

To knock the appraisal claims out of the running would simply be Dell interpreting statute simply as a “gotcha,” and the Chancery Court, as a court of equity, ought to be able to go beyond what is an unreasonable reading of the law, attorney for the petitioners Stuart M. Grant of Grant & Eisenhofer PA said in court.

Vice Chancellor Laster said he would take that matter under advisement and likely issue an opinion in writing.

Dell is represented by Gregory P. Williams, John D. Hendershot, Susan M. Hannigan and Andrew J. Peach Richards Layton & Finger PA and John L. Latham, Susan E. Hurd, Gidon M. Caine and Charles W. Cox of Alston & Bird LLP.

The petitioners are represented by Stuart M. Grant, Michael J. Barry, Christine M. Mackintosh, Jennifer A. Williams and Rebecca A. Musarra of Grant & Eisenhofer PA.

The case is In re: Appraisal of Dell Inc., case number 9322, in the Delaware Court of Chancery.

--Additional reporting by Chelsea Naso. Editing by Chris Yates.


© 2015, Portfolio Media, 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.