'We accidentally hit wrong button on Dell buyout – here's $194m for the cockup' Some former Dell shareholders can thank a voting mishap for an upcoming windfall. Investment house T Rowe Price says it will refund its clients $194m in value lost when it mistakenly supported Dell's 2013 private buyout at a deflated price. According to the finance company, a "voting error" led it to sign off on the proposed …
> "Since this situation began, our focus has been on securing fair value from the Dell buyout for our clients," T Rowe Price CEO William Stromberg said.
Stomberg also didn't add: "We're truly sorry for this mistake. We hope you agree that our waiting 3 years until the Court finally ordered us to pay, was the appropriate and dignified way of resolving the problem."
Sorry but if someone clicked "No" when they meant "Yes" on a deal like this you can be absolutely sure that they would have raised holy hell the moment they realized the mistake. Which, likely, would have been either immediately or when the results of the vote were announced.
Calling complete BS on it.
I agree with you.
T Rowe Price should have VERIFIED how their votes were cast as soon as the results were announced; and waiting this long to raise a stink, well .....
The proper way to insure that this NEVER happens again is to insure that T Rowe Price's OWN shareholders do not take the hit. And the proper way to do exactly that is to deduct that payout from THE EXECUTIVE BONUS POOL. Recoup that loss from the incompetent executive damagers. If any of them don't like it, then they can seek employment elsewhere!!!
As an aside: I'm confused. I thought I'd understood that Michael Dell had been saying for years that the stock was undervalued, but few enough agreed. So then he and a bunch of his friends said they'd buy out the stock, at that undervalued price, with a bit of a sweetener. Done. Then pop up these people saying whoa, that stock was grabbed at an undervaluation! We want the 'real' valuation - moar monay! Is this why I'm glad I didn't get into economics?
I read that some smaller shareholders were forced to sell once a sufficient majority agreed; they might well be aggrieved at being short changed even if voluntary sellers shouldn't be.
This was covered either in an earlier (semi-recent) Reg article or its comments thread.
Nope. That's not how it works actually. It's quite simple; under Delaware law, in certain cases, shareholders in a transaction have appraisal rights, where the courts determine the pricing of the transaction and if it was a fair shake for the share holders.
To exercise the appraisal rights, one of the requirements is that you vote no for the transaction and sue for them. This is no revision of history, it's the fact that the court took 3 years to resolve the lawsuit. It was filed at the time of the transaction.
What T. Rowe did was sue for appraisal rights, but since they voted yes, rather than no, by mistake, they are not eligible for the renumeration. Since they hold the stocks as trustees, they will pay the $194m to those who got screwed by that voting error out of their pockets.
Make more sense? In short - vote yes for the transaction and you don't get to complain about the pricing; vote no AND sue, and maybe, 3 years later once the courts decide in your favor, you collect the difference between the transaction price and the appraisal price.
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