Dell moves to boot T. Rowe from appraisal case
Tech titan Michael Dell is seeking to prove that mutual fund giant T. Rowe Price doesn't deserve a penny more than the $13.75 a share paid to other shareholders for Dell's 2013 going-private transaction.
Lawyers for Dell asked a Delaware Chancery Court judge to decide whether T. Rowe should be allowed to continue its pursuit for more money given new "evidence" that it voted in favor of the transaction. T. Rowe should be "put to proof" on its claims in light of the new evidence, Dell's lawyers said in a letter to the judge that was unsealed Friday.
Dell took the computer company private in 2013 for $25 billion, or $13.75 a share. T. Rowe Price publicly opposed the deal and is now the lead petitioner in a Delaware court case seeking more money.
On May 4th, USA TODAY reported that T. Rowe voted in favor of the transaction despite publicly rejecting the deal's price tag leading up to the vote — and afterward in court filings.
Two days later, Dell's lawyers questioned T. Rowe manager Kenneth Allen about when he learned that T. Rowe had actually voted in favor of the deal, according to the May 8 letter.
Dell stands to save a lot of money if it succeeds in booting T. Rowe from the case. T. Rowe is not only the lead petitioner in the case, but also the largest shareholder with close to 30 million Dell shares.
Allen, portfolio manager for the T. Rowe Science and Technology fund, said he had learned of an "anomaly" in the voting in "the latter half of 2014," according to the letter.
T. Rowe's Allan attributed the voting "anomaly" to ISS, a firm that advises shareholders on how to vote and often casts votes for shareholders, according to their instructions.
"Unless the T. Rowe Petitioners can demonstrate to the Court's satisfaction that their shares were not voted in favor of the merger, notwithstanding the instructions that ISS gave, the shares in question should be excluded from receiving the appraisal remedy," Dell's lawyer, Gregory Williams, said in the May 8 letter.
Mutual fund companies are required to publicly disclose their voting records once a year. In this case, T. Rowe opened the door to its massive stash of voting records in August 2014 — a full year after the controversial Dell deal went to a vote.
