Microsoft may participate in Dell buyout


For all those who were skeptical that Silver Lake could pull for a $20 billion plus leveraged buyout, the firm has an answer.

The private equity giant announced that it is in negotiations with Microsoft, which might make a $3 billion investment in Dell. That would ease the financing burden considerably and just might make the deal doable.

Microsoft has transacted with Silver Lake before, buying Skype for $8.5 billion and providing a $5 billion profit for Silver Lake and others. And Dell remains a key ally of Microsoft, even through the Surface tablet controversy.

Microsoft, with its $66 billion in cash, has been more than willing to make strategic investments. This is certainly one way to keep a still-important hardware company in the Windows truck. FoxBusiness also reports that several hedge funds are in negotiations about also taking a stake. The big issues all revolve around pricing the securities. Microsoft most likely would buy a huge chunk of preferred stock. It will not likely seek an active role in management. 

For more:
- here's an article from FOX Business

Related articles:
Can Silver Lake really turn Dell around?
The awkward truth about a Dell buyout
Silver Lake close to Dell financing

Filed Under