What the Dell Decision Teaches Us About Valuation
The May 31 Delaware Court of Chancery decision In Re: Appraisal of #Dell, Inc. highlights many of the valuation issues faced not only by the Chancery Court in post-merger disputes, but by many courts in all types of disputes over valuation.
In the Dell matter, the Chancery Court held that the fair value of Dell, Inc. was $17.62 per share in a going-private transaction in September 2013. This opinion of value by the Court was about 30% more than the transaction price of $13.78 per share. At first glance, the Court’s opinion of value was surprising, since it is greater than a transaction price derived through a year-long process involving competing arm’s-length proposals.