EDS Shareholder Sues To Block HP Merger - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Leadership // IT Strategy

EDS Shareholder Sues To Block HP Merger

The suit asks a Delaware court to force EDS to auction itself off for a higher price.

An EDS shareholder is suing the tech services company, claiming its planned $13.9 billion merger with Hewlett-Packard undervalues the company.

The suit was filed this week by Joseph Villari in Delaware Chancery Court. Villari wants the court to force EDS to auction itself off for a higher price.

HP agreed to acquire EDS earlier this month. The transaction, which values EDS at $25 per share, is expected to close in the second half of 2008. The $25 a share is a 32% premium over EDS's share price before HP's offer.

HP plans to create a new business unit that will house EDS's operations and be led by current EDS CEO Ron Rittenmeyer, who will report directly to HP CEO Mark Hurd. The new unit will go to market under the name "EDS -- an HP company."

In one stroke, the merger -- if it goes through as planned -- would create the world's second-largest IT and business services company, next to IBM. The combined services revenue for EDS and HP last year was $38 billion, compared with $54 billion for Big Blue.

HP's EDS unit would house 210,000 employees.

HP has struggled to grow its services business internally. Despite publicly stating its intention to become a leader in the outsourcing market and investing accordingly, the company often found itself in the position of also-ran against competitors like IBM, Accenture, and EDS itself when big deals were handed out.

With EDS in-house, HP would double its outsourcing business overnight while adding blue chip customers like American Airlines, Bank of America, and Royal Dutch Shell.

HP shares were up 0.84% to $46.91 in trading Thursday. EDS shares gained 0.45% to close at $24.49.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Commentary
Enterprise Guide to Edge Computing
Cathleen Gagne, Managing Editor, InformationWeek,  10/15/2019
News
Rethinking IT: Tech Investments that Drive Business Growth
Jessica Davis, Senior Editor, Enterprise Apps,  10/3/2019
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
Slideshows
Flash Poll