Gabelli Asset Management is in talks with Bill Gates to keep Gates from converting his debt in the company into stock, Reuters reported on Thursday.

If Gates exercises the option on the debt, he could own approximately 6 percent of Gabelli. For the time being, the notice period for the option has been pushed back to August 5, reported Reuters.

Gates first entered into the agreement with Gabelli in August of 2001. At that time, the the New York Times reported that Gates would invest $100 million in the Rye, New York-based asset manager to help the company expand into Europe.

In exchange for the $100 million, Gates received a 10-year convertible note, which could convert to a six percent stake in Gabelli.

Gabelli pays 6.5 percent on the note in the first year and 6 percent thereafter, reported the NYTimes.

The deal is not the first that Gates and Gabelli have struck up. The NYTimes reported that Gates lent $25 million to Gabelli in December 1999 in exchange for a 17 percent share of Gabelli's telephone business, Lynch Interactive. Gates and Mario Gabelli, head of Gabelli Asset Management, also both attended a computer conference in Idaho.

Cascade Investment LLC, Gates' personal investment firm, holds the debt for Gates. Michael Larson is the primary manager at Cascade. The firm is based out of Kirkland, Washington. 

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