Microsoft may help Dell go private with $1-3 billion investment

Craig Lloyd - Jan 22, 2013, 11:16am CST
Microsoft may help Dell go private with $1-3 billion investment

After last week’s news that Dell is considering going back to being a private company, CNBC is reporting that Microsoft is considering helping out the company with the transition. The move to go private would require a lot of money, and it’s said that Microsoft is willing to kick in between $1 billion and $3 billion to help Dell with the move.

Microsoft is said to be in talks with private investment company Silver Lake and Dell CEO Michael Dell. Essentially, the investment would either be “mezzanine,” meaning debt that converts to equity if the debt isn’t paid back in a certain amount of time, or some sort of preferred shares that would see Microsoft’s investment turned into shares at some point.

This wouldn’t be a surprising move at all for Microsoft. The company is loaded with cash, and they have invested in a handful of big companies in the past, including Facebook, Barnes & Noble, Comcast, and even Apple. Plus, investing in Dell would help out Microsoft in the long run, since Dell obviously relies heavily on the software company with its new Windows 8 OS.

However, we’re sure that HP, Acer, ASUS, and the rest of the Windows 8 hardware bunch will feel pretty betrayed if Microsoft ends up siding with Dell. However, negotiations are said to still be in progress, so the final decision on what Microsoft will do has not yet been decided. Dell was once a giant in the personal computer market, but the company has struggled in recent years, losing over a third of its value just last year. However, the company currently has a little over $5 billion in cash to help it float, and hopefully Microsoft’s investment will see the company make some progress.

[via Business Insider]

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