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.
