CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

HP leads bidding war for Comdisco assets

Hewlett-Packard takes two steps closer to winning the battle for the service provider's disaster-recovery unit, with Comdisco and the Justice Department moving in HP's favor.

The bidding war for the disaster-recovery division of computing services company Comdisco has taken two steps in the favor of Hewlett-Packard, with Comdisco accepting a higher bid from HP and the Department of Justice seeking to block a rival bid by SunGard Data Systems.

The division, called the Availability Solutions Group, helps companies plan for and deal with disasters such as earthquakes or the Sept. 11 attack on the World Trade Center. Comdisco is selling the division, which had $400 million revenue in the year ended Sept. 30, 2000, as part of a bankruptcy recovery plan.

HP and Comdisco initially had an agreement to transfer the 1,300-person division for $610 million, but on Oct. 12, SunGard announced that an $825 million bid had won the approval of Comdisco's board. HP responded that antitrust concerns dogged SunGard's bid because SunGard was a dominant player in the disaster-recovery market.

SunGard's fortunes reversed this week.

On Tuesday, the Justice Department weighed in on HP's side, filing a lawsuit to block SunGard's bid. And Wednesday, HP announced Comdisco's board and the company's creditors committee had approved a new $750 million bid and withdrawn support for the SunGard bid. HP said the sale would be considered at a Nov. 7 hearing of the U.S. Bankruptcy Court for the Northern District of Illinois.

"We're optimistic," said spokeswoman Rebecca Robboy. "The lawsuit validates our position that SunGard's bid is anti-competitive."

SunGard spokesman Brian Robins said the company planned to comment later Wednesday on the new bid from HP.

The Justice Department unsealed a lawsuit Tuesday that had been filed in U.S. District Court in Washington, D.C., that alleges a SunGard acquisition would likely increase the cost and decrease the quality of disaster-recovery services.

"We brought this case to preserve competition for consumers--major companies, universities and governmental entities," R. Hewitt Pate, deputy assistant attorney general at the DOJ's Antitrust Division, said in a statement.

SunGard isn't giving up the fight, though.

"We believe that the government's case is without merit, and we look forward to proving that in court," SunGard Chief Executive James Mann said in a statement.

Mann invoked the Sept. 11 attacks in his argument against the Justice Department's lawsuit.

"In light of the recent attacks on America's infrastructure, it is contrary to public policy for the government to oppose a transaction that obviously will strengthen the ability of SunGard and Comdisco to service the nation's disaster-recovery needs," he said. "Now more than ever, our country needs a vital and capable business continuity industry."