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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.

Note: The various reports of 22% or 23% non-voting Dell shares as of last week compares with 25.1% at the 2011 annual meeting and 26.5% at the 2012 annual meeting (based on the company's SEC reports), indicating that Dell's proxy solicitation efforts persuaded only a small proportion of shareholders to consider the buyout more important than routine matters.

Source: New York Post, July 23, 2013 article

Dell may delay shareholder vote on buyout again

By Josh Kosman

Last Updated: 1:10 AM, July 23, 2013
Posted: 12:10 AM, July 23, 2013

Dell Inc. may delay a shareholder vote on a $24.4 billion buyout offer from founder Michael Dell and private-equity firm Silver Lake for a second time, The Post has learned.

Dell shareholders are scheduled to vote on the $13.65-a-share takeover proposal tomorrow, but Dell’s special committee is weighing pushing back the vote again, sources said.

After months of lobbying, Dell delayed the shareholder vote set for last Thursday to buy more time to persuade shareholders to change their vote or cast their ballots. Several big investors were vocal in their opposition to the plan ahead of the gathering.

Dell Inc. may be forced to push for a second postponement of its shareholder vote over the plan by founder Michael Dell (above) to take the PC maker private.

EPP/Getty Images

Dell Inc. may be forced to push for a second postponement of its shareholder vote over the plan by founder Michael Dell (above) to take the PC maker private.

The latest delay would allow Dell to move forward the date of record for shareholders who are eligible to vote on the deal. The current date of record for stockholders entitled to vote is June 3.

Under Delaware law, Dell should hold the shareholder meeting within 60 days of the record date, or Aug. 3; otherwise, it will need to establish a new record date for shareholders.

Holders of 22 percent of Dell’s shares who were able to vote did not cast their ballots last week before Dell postponed that vote at the last minute. Shares that aren’t cast are counted as no votes against the deal.

With the future of the struggling PC maker on the line, there is speculation that some investors who did not vote have sold their shares but owned them as of the record date.

“It’s an easier deal to get done if you change the record date,” a significant Dell shareholder said.

Dell declined to comment.

A lawyer who has advised boards and special committees said he is wondering at what point the company pressures Michael Dell to sweeten his offer.

“When does the committee say there are no further extensions?” said the lawyer, who asked to remain anonymous.

“You have to call everybody’s bluff,” he added.

Dell’s shares slipped 12 cents to $13.02 yesterday.

jkosman@nypost.com

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 dell@shareholderforum.com.

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.