Dell Inc to go private in $24.4 billion deal, Michael, Silver Lake pay $13.65 per share, Microsoft $2 bn

"Dell has a very tough road ahead,'' HP said, adding that "leveraged buyouts tend to leave existing customers and innovation at the curb.''

Going private also poses other risks. For instance, it will leave Dell without publicly traded shares to entice and reward talented workers or to help buy other companies.

Microsoft also is going out on a limb with Dell.

By becoming a major Dell backer, Microsoft could gain more influence in the design of the devices running on a radically redesigned version of Windows that was released in late October. The closer ties with Dell, though, could poison Microsoft's relationship with HP, the largest PC maker, and other manufacturers that buy Windows and other software. Microsoft's recent release of its own tablet computer, called Surface, already has alienated some of the company's partners.

In a Tuesday research note, Mizuho Securities analyst Abhey Lamba predicted Microsoft's closer ties will push more PC makers to produce machines that run on Google's Chrome operating system and other software besides Windows.

Microsoft's stock gained 13 cents to $27.57 in Tuesday's afternoon trading.

Dell to go private in $24.4B deal led by founder

(Reuters) 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.

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