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T. Rowe Price Group Inc. shareholders are getting some of their money back after a proxy voting blunder cost the mutual-fund company nearly $200 million.

Dell Inc. will pay T. Rowe about $25 million to settle a long-running lawsuit over the technology giant's buyout, according to people familiar with the matter.

That is a fraction of the almost $200 million T. Rowe would have received had it not accidentally voted in favor of the 2013 deal. A Delaware judge ruled last month that founder Michael Dell and his private-equity backers underpaid for the company and ordered them to repay dissenting investors -- a windfall that T. Rowe was ineligible for.

In exchange, T. Rowe has agreed not to appeal a series of unfavorable court rulings that disqualified it from a larger payday, the people said.

The agreement caps an embarrassing saga for T. Rowe, one of the biggest managers of U.S. retirement assets and large shareholder in many large companies. It is an effort to do right by shareholders, who are ultimately on the hook for the payments T. Rowe made to affected funds earlier this month.

Mr. Dell and private-equity firm Silver Lake took Dell private for $13.75 a share, or about $25 billion. T. Rowe publicly opposed the buyout, arguing Mr. Dell and Silver Lake were buying the company on the cheap just as it was poised for a rebound.

But T. Rowe mistakenly voted its shares in favor of the deal, a back-office error that made it ineligible, under Delaware law, to sue for a higher price in court.

Other disgruntled investors did so, and following a trial last fall, a Delaware judge ruled that the pair had underpaid by about $6 billion. Those investors, the largest of which is hedge-fund firm Magnetar Capital LLC, will collect another $3.87 a share, plus interest.

The judge ruled that T. Rowe was ineligible to share in that bounty because of the voting mix-up. He also rejected the asset manager's request for interest payments that would have accrued had it voted correctly.

Under the new settlement, T. Rowe cannot appeal that decision, the people said.

T. Rowe earlier this month said it would pay $194 million to clients as compensation for the error, making the payment from its available cash. The charge, the firm's largest ever one-time deduction from earnings, will reduce second-quarter earnings by 46 cents a share, it said.

Payments were made to four U.S. mutual funds, one overseas fund, two trusts and about a dozen other institutional client accounts. T. Rowe paid the impacted portfolios directly, which resulted in a relatively small performance bump.

Analysts said T. Rowe, which managed $764.6 billion in assets at the end of March, had a strong balance sheet that could absorb the charge. Still, the settlement with Dell helps T. Rowe recoup some of that money and lessens the blow to shareholders.

Assuming the same tax treatment, the settlement would recoup about 6 cents a share in earnings.

For its part, Dell avoids the risk of an expensive and uncertain appeal. It is currently working to complete its $67 billion acquisition of EMC Corp., a particularly complicated deal that, if completed, would be the largest pure technology takeover ever.

Write to Liz Hoffman at liz.hoffman@wsj.com and Sarah Krouse at sarah.krouse@wsj.com

(END) Dow Jones Newswires

June 29, 2016 11:55 ET (15:55 GMT)

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