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.

 

 

A few minutes after transmitting the letter referenced below, Dell filed an SEC report of its text (without a copy of the Forum letter it addressed):

For the referenced demand letter that was not included in Dell's SEC filing, see March 11, 2013 Forum Report: Obtaining the Same Information as Icahn.

 

For a printable copy of this report with a copy of the letter as transmitted, click here.

Forum Report: Fair Investor Access (Dell Valuation Project)

 

Encouraging Practical Resolution of Dell Investor Information Requirements

Dell responded this afternoon to the Shareholder Forum’s demands for information with another letter that carefully explains their lawyer’s views of the deficiencies of the statements presenting the demands. I have replied with a letter [the text of which is copied below] offering to revise the statements to accommodate those views, but encouraging instead a collaborative discussion of practical processes to simply provide the information that investors will need to make their own decisions about the company’s buyout proposal.

Copies of both letters have been posted on the Forum’s website:

I will of course continue to report the progress of communications with Dell.

GL – March 15, 2013

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335

Email: gl@shareholderforum.com

 

 

For a printable copy of this letter with its referenced Forum Report as transmitted, click here.

  [letterhead of The Shareholder Forum]

 

March 15, 2013

By email

Ms. Janet B. Wright

Vice President – Corporate, Securities & Finance Counsel

Dell Inc.

One Dell Way, RR1-33

Round Rock, Texas  78682

Re:       Demands for records

Dear Ms. Wright:

Thank you very much for this afternoon’s letter explaining your specific perceptions of deficiencies in the statements of demands.

If you wish, I will be pleased to accommodate your views in a revised statement of the demands that eliminates the concerns you listed. I would prefer, though, to simply discuss a practical process for responding to the information requirements of investors who need to make their own decisions about what your company and its board’s special committee are proposing. The accompanying copy of a report distributed to Forum participants this morning may help you understand the type of process that is being considered, minimizing the burdens to all parties by allowing agents who are subject to confidentiality obligations to review information as a basis for providing non-confidential reports that investors can use in their decisions. As you will see, the report invites the advice of Forum participants to refine the process, and I will naturally also welcome your advice.

I will in any event try to think of a way to satisfy your view of the technical requirements of Section 220 by some more convenient process than making a separate demand for each Dell stockholder that asks the Forum to act as its “Delegate.”

Sincerely yours,

/s

Gary Lutin

 

cc:        S. Mark Hurd, Esquire

William D. Regner, Esquire

Gregory P. Williams, Esquire

 
Attached:

 

 

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.