Delaware’s Supreme Court ruled yesterday that a lower court erred in finding that the 2013 buyout of computer maker Dell Inc. was vastly underpriced, in an opinion that will likely restrict a hedge fund strategy aimed at wringing cash from mergers, Reuters reported. Yesterday’s ruling stems from an “appraisal” lawsuit that allowed Dell shareholders who opposed the $24.9 billion buyout to ask a judge to determine the fair value of their stock. Last year, a Delaware Court of Chancery judge ordered Dell to pay Magnetar Capital and other Dell investors $17.62 for each of their 5.5 million shares, well above the $13.75 per share deal price paid by Michael Dell and Silver Lake Partners. The Supreme Court said Vice Chancellor Travis Laster abused his discretion by rejecting the deal price as a way to measure the fair value of Dell stock.
