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Microsoft In Talks To Help Finance Dell Buyout: Reports

Microsoft Corp. (MSFT: Quote) is in talks to help finance a takeover bid for PC maker Dell Inc. (DELL: Quote) that would exceed $20 billion, media reported Tuesday, citing people familiar with the deliberations.

In recent days, the software giant entered negotiations with private-equity firm Silver Lake Partners and Dell founder Michael Dell, who has nearly 16% stake in the firm, to buy the computer maker from public stockholders, the reports noted.

Silver Lake has been trying to form a bidding group to take Dell private, and last week's reports noted that it was close to lining up about $15 billion in funds from four banks for a leveraged buyout. Silver Lake is also in talks with the manager of Canada's pension plan and other potential investment partners. As per reports, the private equity firm has been seeking for a cash rich investor to join the group.

It is expected that Microsoft, which has more than $66 billion in cash on hand, would contribute roughly $2 billion in the deal. If successful, Microsoft reportedly would not involve in day-to-day operations at Dell, but Dell would agree to use Microsoft's Windows software to power the vast majority of its devices.

On Tuesday, Dell shares rose $0.28 or 2.18 percent to $13.12, while Microsoft shares dropped $0.10 or 0.37 percent to $27.15.

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by RTT Staff Writer

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