Dell to go private in $24.4 billion deal

NEW YORK, Tue Feb 5, 2013 — Computer maker Dell Inc. will go private in a $24.4 billion deal that also involves Microsoft Corp. and private equity firm Silver Lake, the parties said on Tuesday.

Company founder Michael Dell and Silver Lake are paying $13.65 per share in cash for the world’s No. 3 computer maker.

The deal is being financed by cash and equity from Michael Dell, cash from Silver Lake, cash from Michael Dell’s investment firm MSD Capital, a $2 billion loan from Microsoft and debt financing from four banks.

The transaction is expected to close before the end of the second quarter of Dell’s fiscal 2014.

News of the buyout talks first emerged on Jan. 14, although they were reported to have started in the latter part of 2012. Michael Dell had previously acknowledged thinking about going private as far back as 2010.

The $13.65-per-share price is a premium of about 24 percent to the average of $11 price at which Dell stock traded before news of the deal talks broke and is far below the $17.61 that the shares were trading for a year ago.

Dell has steadily ceded market share in PCs to nimbler rivals such as Lenovo Group and is struggling to re-ignite growth. That is in spite of Michael Dell’s efforts in the five years since he retook the helm of the company he founded in 1984, following a brief hiatus during which its fortunes waned.

Microsoft to invest $2 billion in Dell buyout

NEW YORK, Mon Feb 4, 2013 — Talks between Dell Inc. and a consortium led by its founder and chief executive Michael Dell to take the world’s No.3 PC maker private were still on track on Monday, with negotiations focusing on a price of between $13.50 and $13.75 per share, a person familiar with the matter said.

Talks are in their final stages and an outcome is expected soon, the person said, cautioning that no final agreement had been reached and negotiations could still break down.

Microsoft Corp. is expected to invest around $2 billion in the deal, while private equity firm Silver Lake is expected to put in about $1 billion, the source said. Michael Dell is expected to roll over his roughly 16 percent stake and put in some of his own money so he has control of the company, the source added.

Dell and Microsoft did not immediately respond to a request for a comment while Silver Lake declined to comment.

Former Microsoft executive says CEO Ballmer culls internal rivals to retain power

SEATTLE, Mon Jan 21, 2013 — Microsoft Corp. CEO Steve Ballmer is not the right leader for the world’s largest software company but holds his grip on it by systematically forcing out any rising manager who challenges his authority, claims a former senior executive who has written a book about his time at the company.

“For Microsoft to really get back in the game seriously, you need a big change in management,” said Joachim Kempin, who worked at Microsoft between 1983 and 2002, overseeing the sales of Windows software to computer makers for part of that time. “As much as I respect Steve Ballmer, he may be part of that in the end.”

As a senior vice president in charge of a crucial part of the company’s business with direct access to co-founder Bill Gates, Kempin is the most senior former Microsoft executive to write a book critical of the company, which is famous for the loyalty of its ex-employees.

His criticism echoes that of investor David Einhorn of Greenlight Capital, who called for Ballmer to step down in 2011.

Kempin left Microsoft under a cloud in 2002 as some of the aggressive contracts he crafted with PC makers were seen as fodder for the U.S. government’s antitrust prosecution of the company, which started in 1998 and was largely resolved by 2002.

His book, titled “Resolve and Fortitude: Microsoft’s “secret power broker” breaks his silence”, is scheduled to be published on Tuesday. He talked with Reuters by phone on Monday.

New Microsoft mantra after Sinofsky: teamwork

SEATTLE/SAN FRANCISCO, Fri Nov 16, 2012 – The sudden departure of powerful Windows boss Steven Sinofsky this week is the first step in a plan by CEO Steve Ballmer to remodel Microsoft Corp as a much more integrated operation in an attempt to take on Apple Inc. and Google Inc. at their own game.

After nearly 13 years at the helm of the world’s largest software maker, which just launched its first own-brand computer, sources inside the company say Sinofsky’s departure signals Ballmer’s new-found focus on co-operation between its self-sufficient –  and sometimes warring – units.

“What I’m hearing over and over is collaboration and horizontal integration is the new mantra,” said one Microsoft insider, who asked not to be named. “They (top management) understand that, if they don’t move to a model where devices and software are more integrated across the entire Microsoft system, they are in a weak position.”

After floundering for most of the last decade, Microsoft is trying emulate the way Apple’s software and hardware – such as iTunes and the iPhone – work perfectly together; or how Google’s online suite from Web search to YouTube and Gmail are seamlessly joined.

Microsoft – which Ballmer rechristened as a “devices and services company” last month – has all the parts, analysts say, but has failed to put them together. Now Ballmer looks set to reshape the company to try to make that a reality.

Microsoft unveils Windows 8, Surface tablet

NEW YORK, Thu Oct 25, 2012 – Microsoft Corp. launched its new Windows 8 operating system and Surface tablet on Thursday in a bid to revive interest in its flagship product and regain ground lost to Apple Inc. and Google Inc. in mobile computing.

“We’ve reimagined Windows and we’ve reimagined the whole PC industry,” Microsoft Chief Executive Steve Ballmer told Reuters Television early Thursday ahead of the launch.

Windows 8 devices and the company’s new Surface tablet, which aims to challenge Apple’s popular iPad head on, go on sale at midnight on Thursday.

Steven Sinofsky, head of Microsoft’s Windows unit and the driving force behind Windows 8, opened the launch event in New York in front about 1,000 media and PC industry partners.

He showed off Windows 8′s new look, but stressed that the system was built upon the base of Windows 7, Microsoft’s best-selling software that recently passed 670 million license sales.

The new design of Windows, which dispenses with the Start button and features square tiles for apps, may surprise some users. Initial demand appeared solid, but customers were wary.

Barclays cuts Microsoft price target, others await Windows 8 launch

SEATTLE, Wash., Fri Oct 19, 2012 – Barclays Capital cut its price target on Microsoft Inc.’s stock after the world’s largest software company reported a greater-than-expected dip in its quarterly profit.

However, most brokerages maintained their ratings and price targets on the stock ahead of next week’s Windows 8 launch, described by Credit Agricole Securities as the most comprehensive product refresh cycle in Microsoft’s history.

Microsoft reported a 22 percent drop in profit on Thursday due to a fall in sales of computers running the Windows operating system in a weak PC market.

First-quarter sales fell 8 percent to $16.01 billion and some revenue was deferred ahead of upcoming releases of its core Windows and Office products.

Shares of the company, which closed at $29.49 on Thursday on the Nasdaq, were set to open 2 percent lower on Friday.

While the weakness in the Windows business was expected, the poor showing by the Office business and the server and tools division was a surprise, Barclays analyst Raimo Lenschow.

Lenschow lowered his price target on the stock to $34 from $36, but maintained his “equal weight” rating.

“… We still prefer to wait on the sidelines until after the Windows 8 launch next week,” he said in a note.

Microsoft stumbles into crucial financial year

SEATTLE, Fri Jul 6, 2012 – An ugly first week for Microsoft Corp.’s new financial year, probably its most important to date, has done little to inspire confidence that the software giant can jumpstart a stubbornly stagnant share price.
The world’s largest software company, whose stock remains mired around $30, had prepared a multi-pronged assault to try and break into the crucial mobile computing space this year and take Apple In.c and Google Inc. down a peg.
But on Monday, it announced a $6.2 billion writedown of a 2007 Internet-advertising acquisition – a reminder that Microsoft has a patchy track record when it ventures outside of its Windows and Office comfort zone.
Days later, Vanity Fair blamed Steve Ballmer’s “astonishingly foolish” leadership for a “lost decade,” in one of the most scathing articles ever written about the CEO.
It was not the news agenda Microsoft had in mind as it prepared to unveil fourth-quarter results on July 19. The writeoff is expected to hand the company its first quarterly loss – on paper – since going public in 1986.
“This kind of massive write-off is a stark reminder that Microsoft’s capital allocation policies in the past have not been ideal at times,” said Highmark Capital fund manager Todd Lowenstein.
Microsoft is placing several major bets over the next 12 months: its new Windows 8 operating system; its first tablets; a new version of Office; and revamped phone software.

Microsoft nears deal to buy Yammer: source

REDMOND, Wash., Mon Jun 18, 2012 7—Microsoft Corp. is close to buying business software company Yammer Inc for more than $1 billion, according to a source familiar with the details.

Microsoft’s interest in Yammer, known for its social networking functions, could allow the software giant to beef up its offerings for corporations.

A Microsoft spokesman declined to comment. A representative from Yammer did not immediately respond to a request for comment.

Backed by PayPal co-founder and Facebook investor Peter Thiel, Yammer said it counts more than 80 percent of Fortune 500 companies as clients. It raised more than $140 million in venture capital funding.

Bloomberg, which first reported the deal, said the announcement about the transaction was expected at the end of June.

Aging Microsoft lures 1,500 young tech idealists for summer

SEATTLE, Tue Jun 12, 2012 – The young interns, some of the nation’s best and brightest in technology, business and design, had plenty of enthusiastic words to describe their summer employer.

Fun. Cool. Special. A giant start-up. Revolutionizing the world. Facebook, perhaps? Or Twitter? Or Google?

Try Microsoft Corp: the company once derided as the “death star” of the technology business and lately thought of not so much as dangerous, but merely irrelevant, bureaucratic and dull.

“Microsoft feels cool again,” said 22-year-old Gbenga Badipe, an electrical engineering student at Rice University, one of 1,500 interns spending 12 weeks at the company’s leafy campus this summer. “Microsoft products touch almost every area of technology, and everything they do is starting to work together.”

Microsoft’s keen new interns already think their competitors’ days are numbered, branding Google and Facebook as “creepy” because of their aggressive stance on privacy and heavy reliance on advertising.

“What kind of business model is that, shoving ads in peoples’ faces?” said one Microsoft intern, who asked not to be named.

A recent poll by careers site Glassdoor put Google as the most desirable place to intern, followed closely by Microsoft. They are also the best paid, averaging over $6,000 a month.

Microsoft is “revolutionizing the world,” said Juan Llanes, 25, a computer science and finance major at Georgia Tech, who is also interning in Redmond, Washington this summer. Llanes grew up revering Microsoft during his childhood in Cuba, where computers were effectively banned.

Microsoft executives say the youthful enthusiasm evokes the company’s heyday in the 1990s, when Bill Gates took his revolutionary startup from being International Business Machine Corp’s junior partner to the United States’ most valuable company.

“I went to work at Microsoft because I believed,” said John Ludwig, a senior executive behind the creation of Internet Explorer and Windows 95. “It wasn’t about money. I believed in the idea of getting computers in the hands of everybody.”

Microsoft rises as better-than-expected PC sales boost profit

REDMOND, Wash., Fri Apr 20, 2012 – Shares of Microsoft Corp rose 4 percent in premarket trading on Friday, after the world’s largest software maker reported a quarterly profit ahead of expectations on better-than-expected sales of personal computers.

The deluge of mobile devices such as smartphones and tablets, which has seen Apple Inc and Google Inc vie for top honors in the consumer electronics market, has left Microsoft trying to reinvent itself to compete in the changing landscape.

Thursday’s results boosted optimism in the company, which expects to launch a new tablet-friendly version of Windows, and at least four brokerages raised their price targets on the stock.

“The product launches should create a positive mix effect on gross margin as was the case in the previous two Windows launches,” Barclays analyst Raimo Lenschow said in a research note to clients.

Lenschow, who has an “equal weight” rating on Microsoft’s stock, raised his price target by $3 to $36.

The company’s shares, which closed at $31.01 on Thursday on the Nasdaq, rose to $32.12 in trading before the bell. The stock touched a 4-year high of $32.95 last month, but has declined 6 percent since.