A U.S. court has now ruled that Dell's 2013 $24.9 billion buyout by founder Michael Dell and Silver Lake Partners was underpriced. Specifically, the Delaware court ruled that the deal was underpriced by 22%.
From Reuters:
Michael Dell and Silver Lake Partners underpriced their 2013 $24.9 billion buyout of Dell Inc [DI.UL] by about 22 percent and may have to pay tens of millions to investors who opposed the deal for the computer maker, a Delaware judge ruled on Tuesday.The ruling, which applies to about 5.5 million Dell shares, is a victory for the specialized hedge funds that have increasingly tried to squeeze more money from mergers using a type of lawsuit known as appraisal.
The terms of the original deal specified that the buyout would fetch $13.75 per share for shareholders. However, today's ruling established that fair value was $17.62 per share, and buyers will end up shelling out around $36 million more as a result. Today's ruling can be appealed.
