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Microsoft Called a ‘Sticking Point’ in Dell Buyout

Microsoft has offered to kick in $2 billion or more for equity in the form of convertible preferred securities

The Financial Times claims that Silver Lake's buyout offer for Dell has gone to $15 a share, up from somewhere between $13 and $14.25, if a tablet-induced leveraged buyout can be put together.

Barron's thinks large stockholders are pressing for $20 and the Wall Street Journal says Microsoft's role in the affair is a "sticking point" and "one of several issues being hashed out ahead of a final buyout agreement."

Microsoft has offered to kick in $2 billion or more for equity in the form of convertible preferred securities to take Dell private and is expected to have a say in Dell operations.

The parties are evidently trying to figure how big a sway Redmond would have.

A sensitive point is how the investment would affect their commercial relationship, which doubtless troubles Dell rivals too. Apparently Microsoft envisions the lion's share of Dell's devices being Windows-based.

The Journal's sources still believe the deal is "on track" and could be announced in the next few days.

The deal would include Michael Dell's 16% position, $15 in debt financing arranged by Silver Lake with at least four reported banks, and equity contributions from both Microsoft and Silver Lake.

Reuters says there's a Plan B in case the buyout falls apart: Dell would do the borrowing and buy back a lot of shares but such a path wouldn't solve the basic problems a buyout is meant to address.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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