Merger Price Vs. Discounted Cash Flow: A Study Of Dell

Law360, New York (July 26, 2016, 12:22 PM EDT) -- Rejecting the contention by Dell Inc. that the final merger consideration was the best evidence of its fair value, the Delaware Court of Chancery concluded in an opinion dated May 31, 2016, that the fair value of the common stock of Dell Inc. at the time it was taken private on Oct. 29, 2013, in a management buyout orchestrated by Dell CEO Michael Dell was $17.62 per share, or $31.1 billion. While less than the $28.61 per share, or $50.5 billion calculated by the petitioner's expert, the court's ruling represents a premium of approximately 28 percent ($6.8 billion) over the final merger price of $13.75 per share, and a premium of roughly 39 percent ($8.7 billion) to the $12.68 per share calculated by the respondent's expert....

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