HP deal for CSC not on the table, source says
Despite reports that HP and Blackstone Group would acquire CSC, source says deal talks took HP execs by surprise.
CSC, an information technology consulting firm, was cited as a possible acquisition target of the Blackstone Group, with HP interested in taking a minority stake in the purchase, according to a media report that surfaced on Jan. 5. CSC shares also jumped nearly 8 percent to close at $54.81 that day.
But reports of these preliminary discussions took HP executives and directors by surprise, said an HP source.
"CSC has occasionally come up from time to time as a potential acquisition, but it's nothing that we ever seriously pursued and nothing we were in talks with recently," said the source, who requested anonymity.
Although HP would like to bolster its services business to compete with archrival IBM, the Silicon Valley icon has tried the major consulting acquisition route before.
Five years ago, HP dropped its bid for the consulting arm of PricewaterhouseCoopers, which it had planned to acquire for $18 billion in cash and stock. The deal fell through as HP and the PricewaterhouseCoopers partners wrangled over the pricing structure and the difficulty in dealing with a partnership, the HP source said.
Two years later, PricewaterhouseCoopers sold its consulting arm to IBM for substantially less, in a $3.5 billion deal.
HP and CSC declined to comment on the potential acquisition of the IT consulting company.