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.



For a printable copy of this report with the referenced pages from fund filings, click here.

Forum Report: Dell Appraisal Rights

T. Rowe Price Valuation of Challenged Dell Appraisal Rights

Some of you have observed that T. Rowe Price has established a “fair value” of their Dell stock for which appraisal is sought at only $13.75 per share, as publicly stated by two of its funds that are subject to SEC valuation and reporting requirements.[1] The Dell holdings to which the reported valuations apply are among those that may not be entitled to appraisal, though, and those valuations should therefore not be expected to influence the court’s determination of fair value for Dell shares that are held by other investors with unchallenged rights to appraisal.

As indicated in the referenced Notes of both fund reports, T. Rowe Price has classified its Dell holdings as “Level 3” assets that do not have observable pricing inputs and must therefore be valued by “good faith judgements” of their Valuation Committee that “reports to the Board” and is “chaired by the fund’s treasurer” with “representation from legal, portfolio management and trading, operations, and risk management.” It can be assumed that this committee and the board would be fully informed of the questions about entitlement to appraisal resulting from having voted their Dell shares in favor of the merger, and that they may have accordingly considered it prudent to minimize risks of SEC or investor actions by valuing the holdings based on the amount of the offer price that would be realizable for shares that are not entitled to appraisal.[2] Under these circumstances, the Valuation Committee’s determination of value for their holdings of “yes-voted” shares would be unrelated to investor analyses and expert opinions the court might consider in its appraisal of fair value.

In any event, the petitioners’ lead counsel has committed itself – with explicit support of the court – to advocate the interests of only the claimants entitled to appraisal during next week’s valuation trial, even if those interests conflict with the positions of counsel’s primary T. Rowe Price clients.[3] You should therefore be able to rely upon lead counsel to address any possible reference to the publicly reported T. Rowe Price valuation in its proper context.

GL – September 30, 2015

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335





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.