The pain of the Dell
buyout fight for T. Rowe Price
] is about to be partially alleviated in 25 million little ways.
Liz Hoffman and Sara Krouse of the Wall Street Journal
report that, per unnamed "people familiar with the matter," Dell and T. Rowe have agreed to a $25-million settlement of their legal battle over the 2013 buyout that took Dell private. The news comes three weeks after the Baltimore-based mutual fund shop decided
to shell out $194 million over a shareholder voting mistake
around that Dell buyout.
T. Rowe mistakenly voted "yes" on the Dell buyout deal, leaving it precluded from the suits of other investors' lawsuits over the buyout that resulted in a ruling that the buyers in the Dell deal underpaid by about $6 billion. So T. Rowe is putting that $194 million (from its own cash) into four U.S. mutual funds (as well as some trusts, institutional clients, and an overseas fund) that had been invested in Dell and thus would've benefited from the shareholder lawsuits.
Meanwhile, T. Rowe's $25-million Dell settlement will rule out further appeals. The WSJ
notes that analysts say T. Rowe has "a strong balance sheet that could absorb the charge." Indeed, T. Rowe has a current market cap
of more than $18.1 billion and had more than $1.3 billion in cash on its balance sheet at the end of Q1 2016.
Neil Anderson, Managing Editor
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