Michael Dell is of two minds when it comes to Microsoft.
On one hand, the Dell Inc. founder is glad to accept $2 billion from the software giant to help fund his $24.4 billion buyout of the company.
But the 48-year-old executive of the struggling PC maker thinks Microsoft is the cause of some of the headwinds Dell is now facing.
In a 274-page public filing released yesterday — which lifted the curtain on the behind-the-scenes negotiations among Dell and shareholders, deal financiers and PE firms — the company cited flagging PC sales as well as the decline of tech juggernaut Microsoft.
The “uncertain adoption of the Windows 8 operating system and unexpected slowdowns in the enterprise Windows 7 upgrades” were among many reasons Dell cited in yesterday’s filing as significant drivers behind Dell’s attempts to go private.
The executive is hoping that — via his proposed $13.65 per share offer — a retreat from the scrutiny of the public markets will allow him to breathe fresh life into the company he founded in 1984 out of his college dorm room.
Microsoft would contribute $2 billion to the buyout in exchange for notes that would yield 7.25 percent interest, according to the filing.
A consortium including founder Dell and Silver Lake Partners will finance the offer.
However, those offers may be eclipsed by rival bids from Blackstone Group and Carl Icahn, which are both attempting to pitch better bids.
The filing revealed that Dell first got the idea to take the company private from one of the company’s most vocal shareholders — Southeastern Asset Management — back in August.
At the time, Dell’s buyout partner, Silver Lake, made a $13.75 offer that would have resulted in the company ending its dividend before settling on its “best and final” bid of 13.65, the filing said.
In early February, Dell’s board also had rejected a number of prior Silver Lake bids as unsatisfactory.
Dell’s preliminary proxy says that the current offer represents a 25 percent premium to the closing price of the common stock as of Jan. 11 — before media reports of the deal hit — and a premium of 37 percent over the average closing price over the 90 days leading up to Jan. 11.
The board estimates that the company needs $28 billion to complete the merger, including paying down or renewing old debt.
Dell shares closed Thursday at $14.33, down 1 cent. They have been trading above $13.65 since early February.