Computer Associates, in its efforts to acquire Computer Sciences (CSC), has not lowered last week?s offer price of $108 per share, despite threats that it would do so if the services group continued to refuse to meet it at the negotiating table.
Meanwhile rumours mounted that CSC is looking for a buyer - but not CA. Andersen Consulting, EDS, IBM and AT&T have all been mentioned as possible white knights, although analysts are sceptical than any of them are likely to make a bid.
So CSC may have to rely on negotiating the best price with CA. A letter sent to CSC's chairman Van Honeycutt by CA's president Sanjay Kumar on Monday threatened that, if talks had not begun by noon that day, the firm ?will have no choice but to move ahead on a unilateral basis at a substantially lower price".
The price seems the main sticking point in delaying formal merger talks, since informal ones began last Decemberm it has emerged. Despite that, CA?s $8.56 billion bid for CSC was received coolly last week (see Newswire 12 February).
Honeycutt affirmed that preliminary talks had been held before Christmas, saying there were ?two brief meetings at CA?s request". But he added that "any suggestion that there have been negotiations or agreements between the two companies is absolutely false".
If CA's takoever bid does succeed, it would more than double the firm?s revenues, and will be the second largest IT acquisition after Compaq's of Digital Equipment.
The software giant has also vowed not to axe jobs - because the skills set of CSC staff is one of the main reasons why CA wants to buy them. If the take-over goes ahead Computer Associates will more than quadruple its payroll.
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