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 its referenced letters, click here.

Forum Report: Fair Investor Access (Dell Valuation Project)

 

Organization of Dell Valuation Trust to Support Appraisal Rights

Reporting progress as promised last week,[1] the Dell Valuation Trust has been officially organized to support the interests of Dell shareholders who are considering appraisal rights.

The most time-sensitive support requirement for those who want to reserve the right, of course, is the processing the demand letter that, for beneficial (“Street name”) shareholders must be arranged through custodial administrative services to instruct the record holder’s delivery of the demand on their behalf prior to the voting date, July 18, 2013.[2] The Trust has therefore organized the required administrative services to process the demands for any investor who owns common stock of Dell Inc. with voting rights as of the June 3, 2013 record date, either directly registered or beneficially. If an investor decides to proceed with appraisal rights, the Trust's processing of the demand will make the rights eligible for assignment to the Trust upon the effective date of the proposed buyout.

Any investor who wants to reserve the option to choose between the offer price and appraisal rights should initiate the formal demand by the end of next week, whether the process is managed directly or through the Trust. The Trust’s administrative charges have been set at only one cent per share (subject to a minimum) for authorizations initiated by June 28 to enable orderly processing. A significant surcharge will apply for later initiations, and requests after July 3 will be accepted only with advance Trust approval.

A simple form accessible from the link below can be completed online and automatically emailed to authorize the Trust's processing of the demand. It can also be downloaded for completion and emailing to dell-vt@shareholderforum.com. Questions may be sent to that address, which will forward messages to the attorneys engaged by the Trust for this process, or, as usual, to me.

Next week I will report on the progress of plans for the Trust’s support of marketability for Dell appraisal rights.

GL – June 21, 2013

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335

Email: gl@shareholderforum.com


 

[2] For this and other procedural requirements, see the "Rights of Appraisal" section beginning on page 180 of the company's May 31, 2013 Proxy Statement and Delaware General Corporation Law, § 262. Appraisal Rights.

 

 

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.