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Microsoft linked to Dell deal

Software heavyweight reportedly in talks to join buyout of firm

By Andrea Chang

Los Angeles Times (MCT)

Published: Tuesday, Jan. 22 2013 9:07 p.m. MST

Microsoft Corp. is reportedly in discussions to help finance a buyout of struggling computer maker Dell Inc.

According to the Wall Street Journal, which cited a person familiar with the talks, Microsoft's investment "would likely be in the range of a couple of billion dollars." CNBC reported a range of $1 billion to $3 billion, citing sources close to the matter.

Last week, rumors began swirling that Dell was considering a leveraged buyout and was in talks with private equity firms, with a deal that could be completed by the end of February. Michael Dell, the company's founder and chief executive, has reportedly been negotiating with Silver Lake Partners, which seeks banks and other co-investors to help fund the deal, the Journal said.

Microsoft's entry into the talks was unexpected. Still, Dell is one of the largest companies to make computers running Microsoft's software.

CNBC reported that if Microsoft gets involved, its investment would be in the form of preferred security.

Dell has for years tried to transform itself as it runs into increased competition from Lenovo, Apple, Google, Acer, IBM, Samsung and Hewlett-Packard. About 45 percent to 50 percent of its revenue is estimated to come from desktop and notebook PCs, Wu said.

The company has $11.3 billion in cash and $5.3 billion in long-term debt.

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