EDS Mum on Strategic Talks Report

Mar 25, 2003

CIO Update Staff

A spokesperson for Electronic Data Systems said the company had no comment on a Financial Times report that said Microsoft and Hewlett-Packard were among technology firms that sought out EDS about taking a stake or even making a purchase of the computer services company.

"We don't comment on rumors or speculation," said EDS spokesperson Kristin Dobrowolski on FT's report, which cited people familiar with the company.

Last week, EDS sacked Dick Brown, its chief executive officer, and replaced him with Michael Jordan, who was the top executive at CBS and formerly worked for consultancy McKinsey & Co.

The Plano, Texas-based EDS also brought back former retired top executive Jeff Heller as part of a management shakeup at the computer services giant, as it moved to stanch the company's year-long slide in its stock price, amid a difficult spending environment in outsourcing and a federal regulatory probe over its prior guidance.

New management is moving to take the reins of the company, while the board is looking for a roadmap away from recent difficulties, which is leading to speculation that a strategic investment may be in the works as one option for the number two computer services company.

The FT said EDS received "proposals from more than one party," according to an anonymous source who spoke to the publication. But another source put the number of approaches at "two or three," according to the report.

The report said Microsoft was only interested in a minority investment instead of a full acquisition. As for HP, industry observers wondered how it could be interested in a big acquisition when it is still integrating its acquisition of Compaq.

Spokespeople for Microsoft and HP were not immediately available for comment Monday.


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