Microsoft is considering joining an
investor-led buyout of US computer-maker Dell, The Wall Street
Journal reported Tuesday.
The news came on the heels of reports last week that Dell founder and chief executive Michael Dell was negotiating with private equity firm Silver Lake to buy out Dell's public shareholders for between 13 and 14 dollars a share in a deal that would value the company at around 24 billion dollars.
According to the Journal, Microsoft is considering investing some 2 billion dollars in the buyout, for which most of the funds would be bank financed. Michael Dell is also expected to put up most of his shares in the company as equity.
Dell was once the world's largest computer maker but has seen its fortunes falter in recent years as prices for computers plunge and customers increasingly choose tablets and smartphones over PCs, which formed the lion's share of Dell products.
The company's profit declined 47 per cent in the most recent quarter, while its revenues from PCs dropped 19 per cent.
Microsoft has traditionally avoided getting into the market for PC's so as not to compete with the computer companies who represent the largest buyers of Windows software. However it broke this habit last year when it launched a Microsoft-branded tablet called the Surface to kick-start the market for Windows-based tablet computers.
Microsoft currently has some 67 billion dollars in cash and short term assets and is well placed financially to take a bet on a company like Dell that could help it reinvigorate the market for PCs.
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