Dell going private with $24b deal and $2b loan from Microsoft

Feb 5, 2013
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Earlier this month, we heard reports that Dell was rumored to be backing out of the public game and planned to go private. It turns out that those reports were true, and while the announcement didn't come yesterday like we thought, the company today announced that it will be buying back stock in a $24 billion deal, with help from a $2 billion loan from Microsoft.

The deal is being financed through several different avenues, including cash and equity from company CEO Michael Dell, as well as funds from investment firms Silver Lake and MSD Capital. Along with the loan from Microsoft, a number of banks, as well as Dell's cash on hand, will help with the debt financing.

So far, nothing will change as far as day-to-day operations of the company -- Michael Dell will still remain CEO. Current Dell shareholders will receive $13.65 per share, which is a 25% premium over the company’s closing price on January 11, which was $10.88. The deal values Dell at approximately $24.4 billion, and Dell officially closed at $13.27 yesterday.

The deal has actually been in the works since August, and while everything is finalized, it will all have to be approved before it becomes official, but that shouldn't be a huge problem at this point. As rumored earlier on, Microsoft was indeed in on the deal, with a loan that's smack-dab between the rumored $1 to $3 billion investment.


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