James Delahunty
4 Feb 2013 15:52
Microsoft to take stake in Dell.
A consortium led by Michael Dell, founder and CEO of Dell Inc, has been negotiating a leveraged buyout of Dell Inc., seeking to take the prolific PC manufacturer into private ownership. Michael Dell is joined by Silver Lake and Microsoft Corp, who are expected to put up $1 billion and $2 billion respectively.
Michael Dell will roll over his 16 percent stake of the company and will invest some of his own money, but the deal clearly is heavily leveraged - the largest leveraged buyout since the financial crisis rocked the business world.
Reuters cites a person familiar with the buyout in reporting that price negotiations have narrowed to between $13.50 and $13.75 per share, suggesting a valuation between $23.5 billion to $23.9 billion.
Facing tough competition from Lenovo and others in the space - along with a shift in the industry away from the traditional Desktop - Dell has ceded market share and is struggling to recover.