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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:

Dell investor views of court decision that fund manager's voting error makes its shares ineligible for appraisal rights


For the decision reported below, see

Note: The decision addresses voting of 31,052,130 Dell shares in 14 mutual fund and pension accounts managed by T. Rowe Price, each of which is identified on page 20 (PDF p.21) of the Opinion. In a previous July 13, 2015, Memorandum Opinion in the same case, the court determined that an additional 922,975 shares in 5 other accounts managed by T. Rowe Price were made ineligible for appraisal rights by administrative errors in the maintenance of continuous ownership. According to a July 30, 2015 court submission (footnote #1 on  page 1 of the Brief in Support of Motion; PDF p.10), only one of the accounts managed by T. Rowe Price, the Morgan Stanley Defined Contribution Trust with 357,500 shares, remains eligible for appraisal as a result of the fund manager having failed to process any voting instructions for the account.

Court records addressing both the voting and ownership errors can be found in the "Entitlement to Appraisal Rights" section of the Dell project's reference page.


Source: Austin Business Journal, May 12, 2016 article



Major Dell stockholder ruled ineligible for share appraisal process

May 12, 2016, 10:55am CDT



Christopher Calnan

Staff Writer

Austin Business Journal


A major stockholder in Dell Inc.’s shareholder appraisal process has been ruled ineligible by a Delaware chancery judge on Wednesday.

T. Rowe Price Associates Inc., an affiliate of T. Rowe Price Group Inc. (Nasdaq: TROW) that was once Dell’s third-largest shareholder, can’t be part of the share appraisal process because it voted in favor of the October 2013 $24.9 billion shareholder buyout — even though it was done unintentionally, Law360 reported.

T. Rowe Price Associates Inc., a major stockholder in Dell Inc.’s shareholder appraisal process, was ruled ineligible by a Delaware chancery judge.

Sam Hodgson

“When an investor elects to use intermediaries, the investor assumes the risk that the intermediaries will err or otherwise fail to act in accordance with the investor’s wishes,” Vice Chancellor J. Travis Laster wrote in the court filing, according to the report. “Ironically, by making this argument, the T. Rowe petitioners are effectively contending that [the intermediaries] acted without actual authority (albeit with apparent authority) because of the mistaken conveyance of voting instructions.”

Although an investor group led by CEO Michael Dell paid shareholders $13.75 per share, attorneys for the more than 100 minority shareholders objecting to the price including T. Rowe Price were asking for more than double — or $28.61 per share, according to a Nov. 18, 2015 post-trial opening brief.

Gary Lutin — chairman of Shareholder Forum, a New York company that moderates disputes between shareholders and companies — said the ruling should have no effect on the court determining fair value paid to the remaining Dell shareholders.

"In fact, the amount of money that Dell will save by not having to pay any valuation premium or interest accruals on the 32 million T. Rowe Price shares will be a great improvement for any shareholders who were worried about Dell’s ability to pay them after buying EMC," he said Thursday.

Round Rock-based Dell, the No. 3 computer maker in the world, employs an estimated 13,000 workers in Central Texas. Now privately held, the company is poised to complete this year a $67 billion acquisition of Massachusetts-based EMC Corp. (NYSE: EMC) in what would be the largest technology merger in history.

In late 2015, the Austin Business Journal reported that Dell agreed to pay the New York-based Blackstone Group LP(NYSE: BX) $25 million in due-diligence expenses as a prospective buyer for Dell in the run-up to the 2013 buyout.

Christopher Calnan covers technology, finance and clean energy for the Austin Business Journal.

© 2016 American City Business Journals.


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.