Microsoft to Pour up to $3B USD Into Dell to Help it go Private, Survive
January 22, 2013 2:07 PM
comment(s) - last by
Loan will help reduce the total amount of capital the troubled OEM would need to raise from banks
Following a rocky year on the markets and in sales, one of America's largest computer OEMs, Dell, Inc. (
) is reportedly considering going private and word is that Microsoft Corp. (
) is willing to chip in an investment of $1-3B USD to help it with the plan.
The news was first broke by
last Monday in
saying that Dell had approached private equity firms about participating in a privatization effort. Later in the week details on prospective share buyout pricing emerged; according
The Wall Street Journal
, the target buyout price for shares would be between $13 and $14 USD.
The move to go private was praised by some analysts. For example
's Margaret Hefferan
that Dell is following a broader trend of privatization, a trend that she says is driven by the typical impatience and distraction of shareholders, coupled with their tendency to push for hasty, ill-considered leadership changes.
's Cormac Foster
that the move will grant Dell greater privacy from negative reports regarding its financials, preserving its brand image in the enterprise sector.
The latest development in the Dell saga is a big one --
report that Microsoft is looking to chip in $1-3B USD loan to lighten the debt load Dell needs to privatize.
Microsoft CEO Steve Ballmer (right) may be putting up a loan to help his buddy, Dell CEO Michael Dell (center). [Image Source: CNN Money]
Microsoft's past investments have included Barnes & Noble Inc. (
5 percent stake in Facebook
, Inc. (
) (pre-IPO), and Microsoft's 90s bailout of Apple, Inc. (
) that saved the rival from almost certain bankruptcy.
Microsoft may be able to convert the loan to private shares at some point, which could pay handsome dividends if the privatization works and Dell recovers.
On the other hand, some analysts fear the move could alienate other PC OEMs like Hewlett-Packard Comp. (
) or Acer, Inc. (
) who have
of their own. In that regard the move could suffer from scrutiny similar to
Microsoft's relationship with phonemaker Nokia
) or Google Inc.'s (
direct ownership of Android phonemaker Motorola
, both of which have
troubled third party OEMs
The supposed loan from Microsoft is good news for Dell, should it pursue the privatization strategy. Dell will need to borrow remaining capital from various banks -- and has reportedly approached several. But it cuts the total pool of money Dell needs by as much as 10 percent given its current market cap ($22.88B USD @ $3.16 USD/share)
The Wall Street Journal
This article is over a month old, voting and posting comments is disabled
1/23/2013 7:07:06 AM
"I got two Dell machines, one Vistro 1700 laptop and the other is Dell/Alienware M17, both are rock solid and Vostro is 5 year old, survived two OS upgrades"
Not every Dell machine is bad, but they do have very high failure rates. If every machine failed, or even 20% failed they would have been out of business years ago. Dell definitely keep their repair partners very busy though, especially with the consumer products and low end business lines like Vostro. The high end business stuff is actually pretty good, but priced that way.
"So these troll stories about crappy Dell are just this - troll stories"
To you everyone is a Troll. You know, it just might be possible to express negative views about a company without being a Troll, and positive ones without being a fanboy.
"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner
HP Posts Horrific Guidance, Will Take $8.8B USD Hit on "Improprieties"
November 20, 2012, 9:27 AM
Google to Cut 20 Percent of Motorola Jobs in Revamp Bid
August 13, 2012, 10:54 AM
Nokia Chief Warns Android Phonemakers Should "Watch Out"
August 19, 2011, 8:41 AM
Nokia CEO Denies Being Trojan Horse, Another Former Microsoft Exec Appointed
February 14, 2011, 8:51 AM
Young Love: Microsoft Wins Share of Facebook
October 25, 2007, 9:15 AM
Google's Gleaming Glass HQ Gets Mountain View Snub, LinkedIn Gets the Love
May 7, 2015, 6:58 AM
Tech's Tax Day Fortunate Few: Qualcomm, Xerox, GE, et al. Pay Little or No Taxes
April 15, 2015, 11:30 AM
LinkNYC Terminals to Blanket New York City With Free WiFi, Free Calls, and Ads
November 17, 2014, 6:50 PM
Microsoft is Open-Sourcing Most of .NET, Adding OS X and Linux Support
November 12, 2014, 8:27 PM
Home Depot Lost 53 Million Emails, Blames Windows, Buys Execs New Macs
November 9, 2014, 5:00 PM
Former NSA Lawyer: If Google, Apple Encrypt User Data, They’ll Wither on the Vine Like Blackberry
November 6, 2014, 12:15 PM
Most Popular Articles
Worth the Wait? Microsoft Teases at Windows 10 Flagship Phones to Air Oct. 6
September 15, 2015, 5:13 PM
Apple's First Fixes to iOS 9 Land w/ iOS 9.0.1 Release
September 23, 2015, 6:11 PM
Breaking Bad: How to Crash Google's Chrome Browser With Just 8 Characters
September 23, 2015, 11:08 AM
Apple Watch Commands 2 in 3 Smart Watch Sales, WatchOS 2 Sweetens the Pitch
September 20, 2015, 6:07 PM
Fakebook Pt. I: From "The Chive" to "AskMen"; How Facebook's Phonies are Born and Used
September 15, 2015, 4:00 AM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information