Dell Likes Red Hat For Millions

Michael Dell, the billionaire founder of Dell Computer, has made a $99.5 million dollar investment in Linux vendor Red Hat.

The investment was made through his investment group, MSD Capital, and involved the purchase of Red Hat debentures in January 2005, according to regulatory filings made with the SEC. The purchase could potentially be converted in 3.9 million shares of Red Hat common stock.

The MSD purchase was the largest in a group of more than 100 investors that bought $600 million worth of the Red Hat debentures.

Neither Mr. Dell nor his company were directly involved in the purchase, at least according to the regulatory filings. The Red Hat SEC filing registration No. 333-115389 lists John Phelan and Glenn Fuhrman as the, “natural person or person with voting/investment control” over the $99.5 million dollar debenture purchase.

Started in 1998, MSD Capital, L.P. was created to exclusively manage the capital of Michael Dell and his family. It currently has 70 employees and officially has no relationship with Dell Inc.

Dell Inc. is no stranger to Red Hat. In 2000, Dell and Red Hat announced One Source Alliance, which they formed to help accelerate the commercial adoption of Linux. Dell has been offering Red Hat Linux on its PowerEdge servers since 1999.

In October, Dell began supporting Novell SUSE Linux on its servers, as well.

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