Microsoft (MSFT) Opts for Loan in Dell (DELL) Deal to Avoid Ruffling Feathers
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Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.7%
EPS Growth %: +20.0%
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Earlier today, it was reported that Microsoft Corp (NASDAQ: MSFT) is putting in a $2 billion loan to help finance the Dell (Nasdaq: DELL) 'go private' deal.
According to reports out Tuesday, Microsoft CEO Steve Ballmer was said to meet with Michael Dell, founder and CEO of Dell, to discuss the arrangement. After deliberation, it was decided by Microsoft to use a loan rather than equity financing to avoid the appearance of favoritism toward Dell.
One Monness Crespi Hardt analyst noted that the move gives Microsoft "less of a presence and influence on management" after the deal closes. Lazard was said to advise Microsoft on the move.
Followng the debut of its first PC last summer, the Surface tablet line, Microsoft may have been treading on thinner ice with PC makers. With Microsoft taking a detached stance in the deal, relationships might not come under as much stress as if it were to play a more active role with Dell moving forward.
Shares of Microsoft are up 0.4 percent on the session, while Dell is up about 1 percent.
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According to reports out Tuesday, Microsoft CEO Steve Ballmer was said to meet with Michael Dell, founder and CEO of Dell, to discuss the arrangement. After deliberation, it was decided by Microsoft to use a loan rather than equity financing to avoid the appearance of favoritism toward Dell.
One Monness Crespi Hardt analyst noted that the move gives Microsoft "less of a presence and influence on management" after the deal closes. Lazard was said to advise Microsoft on the move.
Followng the debut of its first PC last summer, the Surface tablet line, Microsoft may have been treading on thinner ice with PC makers. With Microsoft taking a detached stance in the deal, relationships might not come under as much stress as if it were to play a more active role with Dell moving forward.
Shares of Microsoft are up 0.4 percent on the session, while Dell is up about 1 percent.
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