Private equity firm rumored to buy a big chunk of AMD

The same company that took Dell private is rumored to buy one-fifth of the company.


The latest gossip in the soap opera that is AMD is that the company is about to sell 20% of its stake to a private equity investors Silver Lake Partners, the same firm that helped Dell go private.

The source for the rumors is Fudzilla, which has a pretty good track record in the rumor mill department. It says "multiple, independent industry sources that want to remain anonymous" are the source of the rumors.

Silver Lake was the main investment firm in Michael Dell's buyout of his company to take it private, and the firm has also invested in companies like Alibaba, Avago, GoDaddy, Motorola Solutions, and Opera Solutions.

With AMD's stock at $1.88 and a market cap of around $1.4 billion, a 20% stake in AMD would be around $280 million, peanuts compared to the billions needed for Dell. And it would give AMD the cash infusion it desperately needs.

The fact is while AMD has good products in the pipeline courtesy of CPU designer Jim Keller, the Zen processor is still a ways off and AMD's CPU offerings aren't even remotely competitive with Intel. Its GPU business, competitive with Nvidia for the longest time, is now also suffering. The only thing keeping the company going is its SoC business for the PlayStation 4 and Xbox One.

Then there's the question of whether or not AMD has 20% to sell. Besides all the shares outstanding and shareholders, Mubadala Development Co. the investment arm of the government of Abu Dhabi, owns a 19% stake in AMD after helping it spin off its foundry business in 2009 into Globalfoundries.

Some wags are speculating that this is the first step in taking AMD private but again, Mubadala is going to be a big obstacle. That is unless they have lost enough money on the deal and just want out. It certainly invested enough in AMD over the years.

One thing is for sure: Keller can't get the Zen processor done fast enough. For now it seems everyone is in a holding pattern, waiting to see what he produces.

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