Dell To Go Private in $24.4 Billion Deal, Microsoft Lends $2 Billion
Dell, the Round Rock, Texas-based computer giant, today announced its intentions to buy back all of its shares in a deal valued at $24.4 billion. Michael Dell, the founder of the company that bears his name, confirmed the plans to take the company private in conjunction with Silver Lake Partners, a private equity fund. As part of the deal, Microsoft will provide a $2 billion loan to Dell and Silver Lake Partners.
The terms of the deal values Dell at $13.65 a share, which is 25.5 percent higher than the closing price $10.88 on January 11, when rumors of a buyback started circulating.
Other funds will come from MSD Capital, Michael Dell's investment company, Bank of America, Barclays, Merrill Lynch, and RBC Capital Markets. Dell’s cash on hand--about $11.3 million as of Nov. 1--will also be used.
Michael Dell will remain as Chairman and CEO.
Here's Microsoft's statement on the deal. It's clear that Microsoft wants to ensure that Dell doesn't go the Android or Chromebook route.
“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.”