The Dell privatization saga makes a very significant turn as the company has announced a deal to go private. And as speculated, Microsoft could soon come on board as a noteworthy stakeholder in the new private company.
The adventure will cost Dell a neat $24 billion, as the company has announced to pay $13.65 per share to buy them back. This is at least a 25 percent premium on the stock, since the news broke out.
Microsoft announced its part in the buyout deal in a press release on its website:
“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.”
So a $2 billion facilitation from Microsoft, Silver Lake Partners with over $1 billion, with Michael Dell chipping in with his 16 percent stake (valued at $3.7 billion) along with an investment account controlled by him worth $700 million.
The remaining $15 billion is set to be loaned from four banks.
Dell’s board already approved the deal on Monday night as the company announced the news on its corporate website. If everything goes according to plan this will mean the end of an era for the PC vendor that has been a publicly traded company since 1988.
Don’t know if this is a good deal. Dell will be heavily in debt and needs to pay a lot of interest. As profit from PC is getting thinner, it could lose money year after year unless it can find a more profitable market. My store nearly returned all the Dell’s PC we sell last year.