Dell board reportedly set to consider buyout, including big Microsoft investment

Michael Dell (Wikipedia photo)

Bloomberg News is reporting that Dell’s board plans to meet this evening to discuss a potential $24 billion buyout — a move that would take the Round Rock, Texas-based PC maker private. If the board gives the nod, a deal could be announced as early as Tuesday morning.

Citing unnamed sources, Bloomberg said that the deal on the table values Dell at between $13.50 and $13.75 per share. Dell closed today at $13.27, with a market value of $23 billion.

Private equity firm Silver Lake Management is leading the deal, reportedly pumping $1 billion into Dell. But Microsoft also is still part of the mix, with sources telling Bloomberg that the software giant could invest $2 billion alongside Silver Lake.

Michael Dell is expected to maintain a majority share in the company, with Bloomberg News noting that a deal in the $23 billion range would be the largest leverage buyout since the economic downturn.

The involvement of Microsoft is interesting in part because it could signal that the software giant is trying to get more involved in the hardware game, looking to control the entire experience for computer users. (Much as Apple does). Microsoft has a similar alliance with smartphone maker Nokia.

Word of Microsoft’s involvement in a Dell deal first emerged late last month.

What do you think? A good move for Microsoft?

Follow-upMicrosoft: $2B Dell loan supports key partner, helps Windows ecosystem

  • http://www.facebook.com/christopher.ross Christopher Ross

    Should be interesting, particularly what has been learned from the relationship with Nokia.

  • RunTheNumbers

    The strategy for Microsoft seems sound (getting into hardware), but Dell? The Alienware stuff is stout, but otherwise they make crap.

  • guest

    I don’t think it’s about MS hardware aspirations. It’s just a relatively small investment (for MS) to ensure a say in the ongoing business, which is a large customer.

  • Guest

    I wish I could get behind this. They both used to be strong companies. I don’t hear anything about why this is good for either of them.

    Computer Associates built a name in the 90s for buying dying companies on the cheap. They never really had a strategy beyond that and it never made send. Microsoft is doing athe same.