Filing Flows › Microsoft (MSFT) › Takeover & LBO
Is Microsoft (MSFT) a takeover target?
A leveraged buyout at today's price plus 30% ($693.02 a share) would return a loss of about 1% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $357.42 a share (−33% against today's $533.10). At $5.13T it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 2.2% of companies with its figures were bought within a year (0.43× the average). Latest signal (2026-10-21): Private Equity Firms Valued Xbox at Up to $150 Billion in Potential Microsoft Buyout Talks.
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $693.02 | today's $533.10 plus 30% |
| × shares | 7,446.0 million | |
| = Equity value | $5.16T | |
| + Debt refinanced | $35.5B | |
| − Cash | $64.5B | |
| = Enterprise value | $5.13T | 24.9× EBITDA of $205.8B |
| Fees | $102.6B | 2% of the price |
| New debt | $1.13T | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $4.10T | 78% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $374.2B | $222.3B | $86.6B | −$31.5B | $1.16T |
| Year 2 | $399.4B | $237.3B | $89.0B | −$30.5B | $1.19T |
| Year 3 | $421.4B | $250.3B | $91.3B | −$29.6B | $1.22T |
| Year 4 | $439.3B | $260.9B | $93.6B | −$29.1B | $1.25T |
| Year 5 | $452.5B | $268.8B | $95.8B | −$29.0B | $1.28T |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 19.1× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $5.15T | |
| − Debt left | $1.28T | |
| = Buyer's equity | $3.86T | |
| Money multiple | 0.94× | on $4.10T put in |
| Buyer's yearly return (IRR) | −1.2% |
Price against return
What the buyer makes at other premiums over today's $533.10; the IRR reaches 20% at $357.42 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $586.40 | 3.3% |
| 20% | $639.71 | 0.9% |
| 30% | $693.02 | −1.2% |
| 40% | $746.33 | −3.0% |
| 50% | $799.64 | −4.7% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $346.4B | |
| EBITDA, last 12 months | $205.8B | 59.4% of revenue |
| Depreciation and amortization | $42.6B | |
| Capital spending | $135.9B | |
| Debt | $35.5B | |
| Cash | $64.5B | |
| Share price | $533.10 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 20% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Microsoft would cost about $693.02 a share, $5.16T for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $597.07 | $4.45T |
| Median | 30% | $693.02 | $5.16T |
| High end (a quarter paid more) | 31% | $698.35 | $5.20T |
The odds, from history
Historically 2.2% of companies with its figures were bought within a year (0.43× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Rumors and deal signals
- 2026-10-21 · news · Private Equity Firms Valued Xbox at Up to $150 Billion in Potential Microsoft Buyout Talks
Microsoft's latest quarter
Microsoft, Q1 FY27: revenue $92.3B (+19% year over year), operating margin 49.8%, net earnings $36.6B, operating cash flow $58.0B. The chart follows the revenue to costs, profit and cash.
Questions
Is Microsoft being acquired?
The latest signal on file is from 2026-10-21: Private Equity Firms Valued Xbox at Up to $150 Billion in Potential Microsoft Buyout Talks. A headline is not a deal; Filing Flows lists the news, 8-K filings and 13D filings about a sale.
Could private equity buy Microsoft?
A leveraged buyout at today's price plus 30% ($693.02 a share) would return a loss of about 1% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $357.42 a share (−33% against today's $533.10). At $5.13T it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Microsoft cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Microsoft would cost about $693.02 a share, $5.16T for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.