Biz Break: Judge says Dell, Silver Lake undervalued Dell when taking it private

Top Of The Order:  

What The Dell?: Remember three years ago, when Dell Chief Executive Michael Dell decided it was time to take his namesake computer company private? You might recall that Dell brought in some local boys, namely, Silver Lake Partners, of Menlo Park, to help out with the $25 billion deal.

Well, it turns out at the ones who really got a deal were Dell and his private equity partners.

That’s because a judge in Delaware ruled Tuesday that Dell was actually worth about $31 billion when the company was taken private. The ruling came in a suit that some Dell shareholders had brought in which they argued that the company was worth more than the the $13.75 a share that Dell and Silver Lake paid out to take Dell off the public markets back in 2013.

But those former Dell shareholders shouldn’t start looking for the mailman to drop off a check soon, if at all.

Dell could, and probably will, appeal the decision. If, after all avenues are exhausted and Dell and Silver Lake do end up paying anything out, it won’t be that much. Court records showed that only 5.2 million shares were still eligible to be appraised and, due to Delaware law, the most that Dell and Silver Lake could be on the hook for is $35 million, including interest.

So, if our math is correct, $35 million divided by 5.2 million shares equals $6.73 a share. Hey, it’s better than nothing, right?

Middle Innings:

Mark Your Calendars: It ought to be quite the ribbon-cutting event. Maybe Tesla could even work up a battery-powered pair of shears over the next two months?

That’s about when it will be that Tesla officially opens up its Gigafactory battery plant in Nevada. Reports have said Tesla has set a July 29 opening date for the facility, although no media invitations to the event have been sent out, yet. The Gigafactory is considered a critical part of Tesla’s plans to expand its market reach with its upcoming Model 3 sedan. The 130-acre facility is supposed to be fully operational by next year.

No Rest For The Lawyers: What a way to come back from the long, Memorial Day weekend. Lawyers getting to crank up the proverbial hourly rate clock. And as if it wasn’t does with being in court with Google, Oracle’s headed back indoors to do legal battle with Hewlett Packard Enterprise.

Only this time instead of doing the suing, Oracle is the one being sued. Hewlett Packard Enterprise is seeking $3 billion in damages from Oracle related to the Itanium chip platform, which the old HP developed along with Intel more than 20 years ago. Hewlett Packard Enterprise alleges that Oracle worked to undermine the growth of Itanium through several means, including when, in 2011, Oracle said it would build no more database or other software products that could be used with Itanium.

Not A Bad Marketing Job At All: San Mateo’s Marketo began the road toward its end as a publicly traded company Tuesday. The marketing software company said it had reached a deal to be acquired by Vista Equity Partners for $1.8 billion, or $35.25 a share. Reports that Marketo was on the block had been swirling for weeks. The deal is expected to close in the third quarter of this year.

Bottom Of The Lineup:

Here’s a look at how some leading Silicon Valley stocks did Tuesday…

Movin’ On Up: Gains came from Aemetis, Brocade Communications, LinkedIn, Cypress Semiconductor and YuMe.

In The Red: Decliners included Ultra Clean Holdings, FormFactor, Synaptics, Cadence Design Systems and Coherent.

The tech-focused Nasdaq Composite Index rose 0.3 percent to 4,948.

The blue chip Dow Jones Industrial Average shed 0.5 percent to end the day at 17,787.

And the broad-based Standard & Poor’s 500 Index slipped by 0.1 percent to 2,096.

Quote Of The Day: “He’s a winner. He competes. And if you compete, you can do anything.” — Golden State Warriors forward Draymond Green, speaking about teammate Steph Curry (aka, The World’s Best Basketball Player), who scored 36 points in the Warriors’ Game 7 win Monday night that sent the team back to the NBA Finals.

Sign up for the 60-Second Business Break newsletter at www.siliconvalley.com.

Photo: The exterior of Dell’s offices in Santa Clara, Calif., is shown in August 2012. A Delaware judge ruled that Dell, and Silver Lake Partners, of Menlo Park, undervalued Dell when they took the company private in 2013. (Paul Sakuma/AP)

 

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