T. Rowe Price Group won't have to dip quite as far into its cash reserves to pay out investors affected by the Baltimore investment firm's embarrassing misstep in Dell's 2013 buyout after settling with the computer giant this week.
T. Rowe had opposed the proposed $25 billion Dell buyout for undervaluing the company, but accidentally voted for the deal. The mistake cost the company the right to join other investors in suing for a higher price and cost its fund investors about $200 million, the amount they would have been eligible to collect through the lawsuit.
Earlier this month T. Rowe said it would pay $194 million into funds that had held the firm's 31 million shares of Dell stock by taking a one-time charge in the second quarter of its 2016 fiscal year.
In documents filed Friday with the U.S. Securities and Exchange Commission, T. Rowe reported it was lowering the amount of its one-time charge to $166 million, after reaching a separate settlement with Dell.
T. Rowe expects the pay-out to reduce net income, after tax, by $100 million, or 39 cents per share.
T. Rowe confirmed Wednesday it had settled with Dell over the buyout, but would not say how much the deal was worth. The regulatory filing indicates Dell paid $28 million.
A Delaware judge ruled in May that Dell founder Michael Dell had underpaid by about $6 billion as he moved to take the company private, but said that because T. Rowe had voted for the deal, though unintentionally, the firm could not collect on the ruling.
The automated system that instructs T. Rowe shareholders how to vote defaults to a "yes" vote. The firm meant to manually change the vote instruction to "no" for the Dell vote but, because of an administrative mix-up, did not.
T. Rowe shares closed down 63 cents at $72.34 on Friday.