Shearman & Sterling LLP | M&A and Corporate Governance Litigation Blog | Delaware Chancery Court Grants Appraisal Petition After Finding Dell MBO Transaction Provided Stockholders Less Than Fair Value<br >  
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  • Delaware Chancery Court Grants Appraisal Petition After Finding Dell MBO Transaction Provided Stockholders Less Than Fair Value
     
    06/07/2016
    Vice Chancellor Laster of the Delaware Chancery Court recently issued an important opinion in In Re: Appraisal of Dell Inc. C.A. No. 9322-VCL (May 31, 2016), holding that merger consideration offered to Dell, Inc’s common stockholders did not reflect the “fair value” of Dell’s shares. The decision will require the company to pay dissenting stockholders a 28% premium as compared to the consideration that was received by stockholders who did not exercise their appraisal rights. The opinion is notable for several reasons, including because the Court declined to accept that the negotiated market price for the deal was the best available indication of the fair value of the company. Instead, the Court challenged the accuracy of prevailing stock market valuations of Dell, and after criticizing several aspects of the sale process, ultimately concluded that neither the stock price nor the price negotiated during the sale process fairly reflected the fair value of the company. 

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    CATEGORY: Fiduciary Duties

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