Dell Inc. will pay T. Rowe Price Group about $25 million to settle a lawsuit over the technology giant’s buyout. In return, the Baltimore investment firm will not appeal several previous court rulings that would’ve resulted in a larger payday for the company, the Wall Street Journal reported Wednesday.
A T. Rowe Price spokesman said the company has no comment on the story or its accuracy. The Wall Street Journal attributed the settlement news to “people familiar with the matter.” Dell did not return a call on Wednesday requesting comment.
Earlier this month, Baltimore-based T. Rowe announced that it will pay $194 million to reimburse some clients after a proxy vote flub related to the 2013 leveraged buyout of Dell Inc.
At the time of the buyout, T. Rowe Price determined that the $13.75 per share consideration being offered by Dell was too low and opposed the deal. But a computer error related to how the company handles proxy votes caused T. Rowe to vote for a deal it actually opposed.
T. Rowe’s funds, trusts and clients then filed a petition with the Delaware Court of Chancery to obtain fair-value appraisal for its shares. On May 11 the court ruled that because of their vote in favor of the deal, the petitioners were not eligible to pursue fair value.
Later the court also ruled that a fair value per share for the Dell st0ck was actually $17.62 and as a result, validated T. Rowe Price’s initial stance on the stock price. Because of that ruling, T. Rowe said it will make payments to affected clients, covering the difference in valuation and statutory interest because of the denial of appraisal rights.
T. Rowe said it was taking steps to make sure a mishap like this never happened again. No one was fired over the error, the company said earlier this month.