Reports: Microsoft may invest in Dell buyout (Update)

Jan 22, 2013
A Dell Precision R5500 Rack-mounted workstation is seen at the world's biggest high-tech fair, the CeBIT, on March 6, 2012 in Hanover, central Germany. Microsoft is in talks with private equity investors on a possible buyout of US computer giant Dell, the Wall Street Journal and cable news channel CNBC reported Tuesday.

Microsoft has joined the negotiations to buy struggling computer maker Dell, according to media reports.

Both CNBC and The Wall Street Journal reported that Microsoft Corp. may invest some of the money needed to take Dell Inc. private after 25 years as a publicly traded company. Tuesday's stories cited unidentified people familiar with the negotiations.

If Microsoft joins in a Dell buyout, CNBC and the Journal say the software maker would contribute $1 billion to $3 billion. That amount would make Microsoft Corp. a minority investor in a complex deal expected to cost $23 billion to $27 billion if it's completed.

Microsoft declined to comment on the reports.

Word that Dell Inc. is interested in selling to a group led by buyout firm Silver Lake Partners first surfaced last week. Dell's stock price has climbed about 20 percent since then. The stock rose 33 cents, or 2.6 percent, to $13.17 in Tuesday's early afternoon.

Dell, which is based in Round Rock, Texas, hasn't said whether it's interested in selling. Going private, though, would enable the company to overhaul its operations without having to meet Wall Street's demands for higher quarterly earnings.

Dell, the second largest U.S. computer maker behind Hewlett-Packard Co., is one of Microsoft's biggest partners. Among other things, Microsoft licenses its Windows operating system to Dell's personal computer makers.

Like many other PC makers, Dell's revenue has been sliding as the popularity of smartphones and tablet computers divert consumer and business spending from laptop and desktop machines.

By becoming a part-owner in Dell, Microsoft would risk being viewed by HP and other PC makers as more of a rival than a partner. Microsoft already has rankled some of its PC makers by releasing a tablet computer called Surface that competes against their products.

So far, though, there has been little evidence indicating that the Surface is reshaping the market for computing devices.

Explore further: Uber says outside review shows customer data safe, private

2.3 /5 (4 votes)
add to favorites email to friend print save as pdf

Related Stories

PC maker Dell to pay dividends

Jun 12, 2012

Struggling computer maker Dell announced Tuesday it will use some of its cash stockpile to pay shareholder dividends as it pursues a shift to services.

Dell's profit, stock drop on weak quarterly report

Nov 19, 2009

(AP) -- Some of the computer-industry's biggest players - such as IBM Corp., Intel Corp. and Hewlett-Packard Co. - have wowed Wall Street this fall with stronger-than-expected profits.

Analysts: Dell buyout could make sense

Jan 18, 2013

Back in 2010, Michael Dell acknowledged that he had considered taking his company, Dell Inc., private, but he declined to say much about it.

Recommended for you

Airbnb to expand tax collection efforts

Jan 30, 2015

Online lodging operator Airbnb is expanding its efforts to collect local taxes, responding to complaints that it competes unfairly with the hotel sector.

Jay Z to acquire Wimp music service

Jan 30, 2015

US rap star Jay Z will make a $56-million foray into the music streaming business by taking over the Norwegian service Wimp, its shareholders confirmed Friday.

How can Google snap its stock out of its stupor?

Jan 30, 2015

Google has turned into a stock market laggard as the shift to mobile devices has lowered the Internet search leader's digital ad prices and the company's expensive investments in far-out technology has trimmed ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.