HP to buy UK's Synstar for $300 m

LONDON: U.S. computer giant Hewlett-Packard has agreed a cash offer for Britain's Synstar, valuing the IT services provider at around 163 million pounds ($297 million), said Synstar.

Shares in Synstar jumped by over a quarter in value in morning trade to change hands at a shade under the offer price of 100 pence cash per share, a 28 percent premium to Friday's closing price.

"The board is pleased to recommend this offer because it recognizes a premium to the value in our strategy," said Chief Executive of Synstar, Steve Vaughan. "The cash offer gives our shareholders immediate certainty of that value."

One analyst welcomed the deal.

"It's a reasonable deal for both sides, it's a decent price for Synstar and a good fit for HP's service portfolio," said Adam Lawson, analyst at broker Teather and Greenwood.

Synstar, based in Bracknell, south England, provides services ranging from basic software support to restoring IT networks at its recovery centers. The shares reached highs of 250 pence during the dotcom boom.

The offer for Synstar was made by Merrill Lynch on behalf of HP BV, a wholly-owned subsidiary of Hewlett-Packard. Synstar was advised by Investec.

HP, the world's No. 2 computer maker, competes for sales of everything from printers to computer services with both IBM and Dell Inc., the largest maker of personal computers.