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Dell (NASDAQ: DELL) Buyout Imminent

|Includes:Dell Inc. (DELL), MSFT

According to a news report released by Reuters this morning Dell (NASDAQ: DELL) is nearing a deal for a buyout from a consortium led by CEO Michael Dell and Silver Lake Partners. Microsoft (NYSE: MSFT) is also in on the deal. Sources close to the company (who have asked not to be named) indicate that the contract could be inked as soon as February 4 2013. Michael Dell will be majority owner of the company with Microsoft (NASDAQ: MSFT) and Silver Lake taking on minority ownership. Dell is the third largest computer maker globally with a market capitalization of over $24 billion and stock is trading up in heavy volume today on the heels of the news. Shares are selling for over $14.00. Emerging growth ran an article on the company earlier this month and the stock was trading at $10.00 then.

The cost the consortium will reimburse Dell shareholders has not been released, but Michael Dell will use his current stake in the company, estimated to be around 16 percent, as leverage in the buyout. The investment group has secured as much as $15 billion from four banks; Barclays (NYSE: BCS), Bank of America Merrill Lynch (NYSE: BAC), RBC Capital and Credit Suisse (NYSE: CS). Representatives from all parties have declined to comment.

Dell has had its share of problems lately with the PC market shrinking bit by bit, although business use of the PC is not suffering and has in fact gone up. Seems the company wants to tap further into that portion of the market and going private will allow Dell to make itself into a primarily corporate tech vendor away from public eyes and shareholder criticism.

In the best interest of its shareholders, the company has formed a committee of independent directors and hired Evercore Partners Inc. in order to make sure they are getting the best deal possible. Rumor has it that $13 to $15 is not beyond reason. All things considered, the coming week should be quite interesting for shareholders and the company that helped to make the PC a household appliance.

Stocks: DELL, MSFT