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No word on whether or not the deal was taken at this time

Over the last week or so there has been a lot of buzz surrounding a leveraged buyout of computer manufacturer Dell by a consortium led by company founder Michael Dell. Michael Dell has been working with Silver Lake Partners and Microsoft to take the company private.

Michael Dell has previously been tipped to be using his current 16% ownership in the computer company he founded and as much as $1 billion of his own money in a bid to become the majority owner if the buyout goes through. A source that claims to be familiar with the negotiations says that the Dell board voted last night on whether or not to take the buyout offer.

For its part, Microsoft offered up this satement:

Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.

We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.

Some analysts believe that taking Dell Inc. private will allow the company to operate more efficiently and take its doings out of the public eye making acquisitions easier to accomplish. Dell Inc. has been a publicly traded company for nearly 25 years. If the buyout deal happens, the transaction will be the largest leveraged buyout in the technology industry since the global financial crisis hit.

The Wall Street Journal reports that the final deal is worth about $23 billion.
 
Dell Inc. was once the world's largest computer maker with a market capitalization of over $100 billion. The company has had a difficult time competing in the ever-changing computer industry and has seen its market share dwindle -- it is now the third largest computer maker in the world. No official comments have been offered on the buyout by any of the interested parties at this time.

Sources: Bloomberg, Wall Street Journal, Microsoft



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RE: Meh
By TakinYourPoints on 2/6/2013 4:48:27 AM , Rating: 2
History time!

The cash bailout wasn't the important part of their deal, application support, cross-licensing technologies, and settling charges out of court was.

Even in their beleaguered state in 1997, Apple was worth about $3BN in market cap and had about $1.5BN in cash. They were losing money but they'd gotten back in the black the same year by axing most of their products (printers, PDAs, etc) and reducing their computer line from dozens of product lines to only four (desktop/laptop consumer/pro).

The cash investment of $150 million dollars, which is nothing compared to their market cap and liquid assets, were restricted non-voting shares created by diluting existing stock (slightly reducing stock value for existing shareholders in the process).

It was basically funny money created out of thin air.

The deal was important but not in terms of the "investment".

Apple dropped charges against MS (important as MS was under heavy fire from the DOJ at the time) regarding the UI and stealing code from Quicktime. They did this in exchange for continued development of Internet Explorer and Office, which is actually the most important thing Microsoft did for Apple as it instilled confidence in a platform that was on thin ice.

Also important was a cross-licensing relationship that continues to this day. Microsoft licensing Apple's technologies for Windows Phone is the latest example, while Apple is one of the biggest, if not the biggest, licensees of ActiveSync.

So why do the investment in the first place if it was meaningless funny money? Simple: It was done for marketing and saving face.

Jobs is a showman, everyone knows that, and saying that Microsoft was bailing out Apple was a very flashy way to make Apple look like they were being saved, even though they were already well on the way to profitability, and it made Microsoft look like the heroes (continued Office and IE support sounds WAY boring in comparison even though it did way more to help the platform).

So yeah, it was marketing, and apparently it is so effective that people who don't know their history still refer to it. :)


RE: Meh
By TakinYourPoints on 2/6/2013 8:24:14 PM , Rating: 2
And to be perfectly clear, if you believe that a .035% stake created out of thin air constitutes a "bailout", then you have some serious reevaluation to do.

Microsoft has a full 8% investment in Dell, and the last thing anybody would call it is a bailout.


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