Dell said to be finalizing buyout with Silver Lake

  • Article by: JEFFREY MCCRACKEN , a nd DINA BASS Bloomberg News
  • Updated: January 22, 2013 - 7:02 PM

In addition, Microsoft reportedly is considering adding $2 billion for deal.

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Dell and Microsoft are scrambling to catch up in the market for tablets – currently a stronghold for Apple and Google products.

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NEW YORK - Dell Inc. is getting closer to clinching a leveraged buyout with Silver Lake Management, and Microsoft Corp. is planning to provide part of the funding, people with knowledge of the matter said.

Silver Lake and Dell are negotiating a price in the range of $13.50 to $14.25 a share, said one of the people, who asked not to be named because the talks are private. Microsoft is discussing contributing about $2 billion for the deal, which could be announced this week, the person said.

Microsoft stands to benefit from propping up Dell, one of its largest partners in selling personal computers that run Windows software. Both companies are racing to make up for an industrywide slump by working together on tablets, a market led by Apple and Google. Microsoft could also use Dell's help selling to business customers.

Gemma Hart, a spokeswoman for Silver Lake, declined to comment, as did Frank Shaw, a spokesman for Redmond, Wash.-based Microsoft, and David Frink, a spokesman for Round Rock, Texas-based Dell.

If the deal isn't completed this week, that would indicate that price has become an obstacle, and that the transaction is at risk of falling through, one of the people said. CNBC earlier reported that Microsoft plans to help finance the deal.

Dell is just one of a handful of vendors selling a tablet machine with Windows RT, a version of Microsoft's operating system for chips running ARM Holdings Plc's technology. Dell will also begin shipping a separate tablet using the main operating system, Windows 8, later this month.

Microsoft needs the support of PC makers as Apple, Ama-zon.com and Samsung Electronics lure consumers with tablet devices. Microsoft has also shifted its longstanding tactic by competing with its own partners in selling a tablet machine of its own, called Surface.

Microsoft hasn't commented on Surface sales, leading some analysts to speculate that the machine might not be selling well. Windows 8 also had a disappointing debut, said Todd Bradley, executive vice president at the largest PC maker, Hewlett- Packard Co.

Computer makers and Mi-crosoft are facing a prolonged downturn as PC shipments are forecast to drop for the second year in a row in 2013. They fell 4 percent in 2012 and will slide a further 1.5 percent this year, JPMorgan analysts estimate. Tablet sales rose 72 percent last year and will surge 54 percent this year, JPMorgan forecasts.

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