Rumor: Dell to go private—with Microsoft's help

I don't know if you've kept up with the Wall Street chatter lately, but word out there is that Dell is going to go private—and Microsoft may be involved in the move. The latest story on the subject was published by Bloomberg, and it says Michael Dell will break his own piggy bank to get majority control of the company:

By contributing his stake, worth about $3.6 billion at yesterday’s close, and another $500 million to $1 billion, Michael Dell would be putting up more than half of the total $8 billion to $9 billion equity check, with the remainder of the takeover financed by debt and possibly some of the $11 billion of cash Dell reported it had as of Sept. 30. Silver Lake and Microsoft would invest $1 billion to $2 billion each, said the people with knowledge of the talks.

The Wall Street Journal has some additional details on Microsoft's role. It quotes "people familiar with the matter" as saying the software giant "is expected to have a say in Dell's operations rather than being just a source of funding for the Dell buyout." The sources also mentioned that Microsoft's role "is proving a sticking point," and that the firm is negotiating over its future say in running Dell.

Interesting. As the Journal points out, Dell is still the world's third-biggest PC maker, behind HP and Lenovo. According to Gartner, Dell is also in the number-two spot domestically. The PC maker seems to be struggling to keep up with competitors, though; the latest Gartner figures show Dell's shipments declined by 20.9% internationally and 16.5% domestically last quarter.

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