The Wall Street Journal, July 24, 2013 article

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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.

For the proposal letter reported below and a supporting statement, see

For the views of a legal commentator, Leonard Chazen of Covington & Burling, published the previous day advocating the subsequently proposed voting conditions, see

July 22, 2013 Law360: "Did The Dell Majority-Of-The-Minority Clause Go Too Far?"

NOTE: The version of the article presented below was distributed to Forum participants shortly after its publication. An updated version that appeared in the next day's print edition of the Wall Street Journal, together with a related video, can be viewed here.

Source: The Wall Street Journal, July 24, 2013 article

THE WALL STREET JOURNAL.

TECHNOLOGY | Updated July 24, 2013, 9:34 a.m. ET

Dell Buyout Group Calls for Change in Voting Requirements

Founder, Silver Lake Suggest Abstentions, Which Currently Count as 'Nos,' Instead Don't Count at All in Tally

By SHARON TERLEP

The group trying to take Dell Inc. private is pressing the company to change how it counts shareholder votes to improve the odds of their buyout winning approval, and has offered to increase its bid by less than 1% as an incentive.

Michael Dell and private-equity firm Silver Lake have proposed that abstentions, which currently count as "nos," instead don't count at all in the tally on their buyout bid for the company.

Bloomberg

Michael Dell

Dell's special committee says it is evaluating the offer, which calls for raising the bid by 10 cents to $13.75, as well as changing the rules on the voting.

Dell postponed a shareholder vote that had been scheduled for Wednesday on the previous $24.4 billion bid a second time to Aug. 2. The meeting was delayed last week after the vote didn't appear to garner enough shareholder support.

Dell shares were down 0.5% at $12.81.

Dell's special committee put in place the current voting rules, which also prohibit Mr. Dell's votes form being counted, as a way to limit Mr. Dell's influence over voting on the buyout. He is founder, chairman, CEO and Dell's largest shareholder.

Any changes to those rules are bound to be controversial, and the special committee had worried that such moves could prompt lawsuits from shareholders after the deal, people familiar with the group's thinking have said.

Still, the buyout group had made clear it would only offer more money if it were to see a change in voting rules that would make the bid more likely to succeed, these people said.

Shareholders have been pressing the group to boost the offer, which some have criticized as too chintzy since it was announced in early February.

Richard Pzena, head of Pzena Investment Management LLC, the No. 20 shareholder in Dell as of the most recent data available, criticized the revised offer and the board's handling of the situation.

"I can't believe 10 cents is worth changing the terms," Mr. Pzena said Wednesday. "Obviously [Mr. Dell] can't win so he is trying to change the rules.

The 16% stake held by Mr. Dell and his affiliates effectively couldn't vote, meaning the buyout group needed at least 42% of outstanding shareholders to vote in the affirmative.

Also Wednesday, the buyout group call the new offer its "best and final"�language it hadn't used earlier. The group also said its new offer expires at 6 p.m. EDT Wednesday.

Activist investor Carl Icahn, Dell's second-largest shareholder behind Mr. Dell, has repeatedly criticized the bid, saying the proposal undervalues Dell's shares.

"This is our best and final proposal," says a letter the group wrote to Dell's special committee. "There is simply no rational basis for shares that are not voted to count as votes against the merger agreement for purposes of the unaffiliated stockholder vote."

A representative for Mr. Icahn wasn't immediately available for comment.

�David Benoit contributed to this article.

Write to Sharon Terlep at sharon.terlep@wsj.com

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