CNBC’s David Faber reported that Microsoft is in talks to participate in the deal to take Dell private.
According to his sources, Microsoft might invest $1-$3 billion with the group looking to take Dell private.
Microsoft is talking to Silver Lake and Michael Dell, who are working on the deal.
The Microsoft investment would be “mezzanine,” or some sort of preferred shares, says Faber.
Mezzanine is typically debt that converts to equity if the debt isn’t paid back in certain period of time.
Investing in Dell would be very interesting for both companies.
Part of Dell’s downfall can be attributed to its reliance on the Windows-based PCs, which is a shrinking industry.
As a private company, Faber notes that Dell wants to reinvent itself.
If Microsoft is an investor, it’s going to have influence over Dell’s business.
This could limit Dell’s ability to seek out a new model.