CSC prepares for takeover bids
Print storyAnd slashes European operations
Posted in Financial News, 4th April 2006 15:56 GMT
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The board of CSC are mulling approaches for a sell off. A restructuring plan was also announced, with 5,000 jobs set to be shed, mostly in Europe.
Shares in the IT services company rose more than four and a half per cent on the news.
CEO Van B Honeycutt said: "For some time it has been apparent to us, and to other companies in our industry, that there is excess capacity in certain geographies. This action is designed to enhance shareholder value regardless of any strategic alternatives we may explore."
CSC posted a profit of $810m from revenues of $14.06bn in 2005.
The board expects the cuts to save them $150m in 2007 and double that the following year.
A takeover bid has for CSC has been rumoured for some time. It has faced increased competition from Indian and Chinese providers who can undercut it.
The board has not named their suitors, but Lockheed-Martin, HP, and private equity firms all have reportedly shown interest in an acquisition which the Wall Street Journal has valued at $10.6bn. Analysts say the sale will attract close federal scrutiny because of CSC's billions of sensitive defence contracts.
CSC has employed investment banking giant Goldman Sachs to advise on any deal. ®
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