HP offers to buy Comdisco for $750 m

By : |October 31, 2001 0



Peter Henderson

SAN FRANCISCO: Bankrupt Comdisco Inc. said on Tuesday it had struck a deal to
sell its disaster recovery services to Hewlett-Packard Co., but SunGard Data
Systems Inc. said it had not pulled its higher bid.

                                 

___________________________________________________________________________________________________________

A Comdisco spokeswoman said her firm would support Hewlett-Packard’s $750
million offer at a hearing scheduled for Nov. 7 by the US Bankruptcy Court,
which will decide the matter. "We intend to seek approval of the
Hewlett-Packard bid at the hearing," said Comdisco spokeswoman Mary Moster.
But the SunGard bid was still on the table for the court to consider, she added.

Comdisco’s disaster recovery business, which companies rely on to rebuild
after losing equipment, data and communications, has become especially sought
after since the Sept. 11 attacks which destroyed the World Trade Center and
damaged the Pentagon.

SunGard spokeswoman Madeline Hopkins said her firm was working with the US
Department of Justice to resolve by Nov. 15 an anti-trust suit aimed at blocking
SunGard’s $825 million bid. Hopkins said the bankruptcy court had the statutory
discretion to delay the sales hearing scheduled for Nov. 7, but she declined to
say if SunGard would seek such a delay.

"Our position is unchanged. We still believe that our bid would be the
highest and otherwise best offer, and we intend to pursue that
transaction," Hopkins told Reuters.

Comdisco’s board and creditors supported Hewlett-Packard, although it
appeared a committee of Comdisco shareholders still supported SunGard, Moster
said.

HP dwarfs both SunGard and Comdisco in total sales, but it is barely a player
in the disaster recovery business, where SunGard, Comdisco and International
Business Machines Corp. dominate. The Department of Justice says a SunGard-Comdisco
merger would hurt competition.

Hewlett-Packard bid $610 million for the unit in July after Comdisco filed
with US Bankruptcy Court of the Northern District of Illinois for Chapter 11
protection. SunGard bid $775 million for the unit in August and later increased
that bid to $825 million at the beginning of October. HP raised its offer to
$750 million earlier last week.

Shares of Hewlett-Packard closed off 43 cents to $16.97 before the news and
SunGard fell 34 cents to $25.52 on the New York Stock Exchange.

Reuters Limited.

No Comments so fars

Jump into a conversation

No Comments Yet!

You can be the one to start a conversation.