Wednesday, December 4, 2013
OK, so here is the probably the first of what might ultimately be a handful of appraisal pettions filed with the Delaware Chancery Court. This one was was entered at the end of October. OK, so the thing that strikes me immediately is that the petitioner holds only 100 shares. Really?! 100 shares?! Definitely someone was drinking the Icahn appraisal kool-aid. The petitioner looks to get their attorney fees paid for by Dell. I should hope so. With 100 shares at stake, the fees just to file the peition have probably wiped out the economic value of the petitioner's position. The only way this petition makes a lick of sense is if there is a large class of petitioners that this one can join.
Turns out that the class of shareholders who are seeking appraisal is 47,529,513. Here's the list of petitioners (verified list of petitioners). Of those shareholders seeking appraisal, 14% failed to perfect their rights (either by not holding continuously, or by not signing their demand letter, or by submitting the demand letter too late). That leaves almost 41 million shares seeking appraisal. Sounds like a lot!
Actually, it turns out that the 41 million who have perfected their rights represent only 2% of the outstanding shares of Dell. In many states (but not Delaware), the appraisal statutes require that a minimum percentage (typically 5%) of shareholders seek appraisal before the court will entertain an appraisal petition.
Icahn himself held over 156 million shares of Dell. When he decided to take the merger consideration that really took the steam out of appraisal push.