Report: Michael Dell May Front His Own Money To Keep Control


Dell CEO Michael Dell might invest up to $1 billion of his own money in order to keep control of the company founded, according to Bloomberg.

Michael Dell currently owns 16 percent of the Round Rock, Texas-based company, according to reports, which is worth close to $4 billion, based on the company's $13.25 per share closing price on Jan. 29.

Dell has been in talks with equity firm Silver Lake Partners and other firms about taking the company private, according to reports. Microsoft also has been a rumored investor in the company.

Related: 6 Reasons Dell Should Go Private

With support from Silver Lake and others, Michael Dell, with his own investment, would then have more than half of an $8 billion to $9 billion equity check needed to go private. The remainder, which could total up to $15 billion, would be financed by debt or by some of the $11 billion the company has in the bank, according to Bloomberg.

Dell, the company, is reportedly considering the leveraged buyout to more quickly transform its business away from PCs and into higher-end and higher-profitable enterprise products and services.

Dell's stock in 2012 ranked 30th among 35 vendors tracked by CRN, falling nearly 31 percent for the year.

Other companies, including Seagate and Watchguard, have been successful after going private and several of Dell's key solution provider partners said they'd welcome the company's privatization, saying it could help them focus more on technology and integrating Dell's numerous acquisitions without having to worry about Wall Street.

A CRN survey of nearly 200 VARs found that 41 percent of respondents said a leveraged buyout would have a positive impact on Dell's channel business and strategies, while only 11 percent expected a negative impact.

PUBLISHED JAN. 30, 2013