The effort to take Dell private has gained a prominent, if unusual, backer: Microsoft.
The software giant is in talks to help finance a takeover bid for Dell that would exceed $20 billion, a person briefed on the matter said Tuesday. Microsoft would be expected to contribute up to several billion dollars.
An investment by Microsoft could be enough to push a leveraged buyout of the struggling computer maker over the goal line. Silver Lake, the private equity firm spearheading the takeover talks, has been seeking a deep-pocketed investor to join the effort. And Microsoft, which has not yet made a commitment, has more than $66 billion in cash.
Microsoft and Silver Lake, a prominent investor in technology companies, are no strangers. The private equity firm was part of a consortium that sold Skype, the online video-chatting pioneer, to Microsoft for $8.5 billion nearly two years ago. And the two companies had discussed teaming up to invest in Yahoo in late 2011, before Yahoo decided against selling a minority stake in itself.
A vibrant Dell is an important part of Microsoft's plans to make Windows more relevant for the tablet era, when more devices come with touch screens. Dell has been one of the most visible supporters of Windows 8 in its products.
That has been crucial at a time when Microsoft's relationships with many PC-makers have grown strained because of the company's move into making computer hardware with its Surface family of tablets.
Frank Shaw, a Microsoft spokesman, declined to comment. If completed, a buyout of Dell would be the largest leveraged buyout since the financial crisis, reaching levels unseen since the takeovers of Hilton Hotels and Texas energy giant TXU. Such a deal would take advantage of Dell's still-low stock price and the abundance of investors willing to buy the debt issued as part of a transaction to take the company private. And Silver Lake has been working with Dell's founder, Michael Dell, who is expected to contribute his nearly 16 percent stake in the company to a takeover bid.
Shares of Dell closed up 2.2 percent Tuesday, at $13.12. They began rising after CNBC reported Microsoft's potential involvement in a buyout. Microsoft shares slipped 0.4 percent, to $27.15.
Microsoft's lending a hand to Dell could make sense at a time when the PC industry is facing some of the biggest challenges in its history; the rise of tablets and smartphones.