Computer Sciences Sale Talks Stall

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Talks on the potential sale of Computer Sciences Corp. have stalled over how the El Segundo-based technology outsourcing company would structure a deal with Lockheed Martin Corp. and three private equity firms, the Wall Street Journal reported on Monday.


While the two sides have roughly agreed to a price of about $65 a share, or $12 billion, they haven’t yet reached a decision over how a deal would be carried out.


CSC wants to sell itself in one piece to Lockheed, which then would keep CSC’s defense-contracting business and sell the rest to Warburg Pincus, Texas Pacific Group and Blackstone Group. Lockheed, worried about taking on the added risk of completing the second deal, wants to divide CSC into two pieces that will be sold simultaneously, the newspaper said.


CSC so far has balked at the idea, sources told the Journal. The Journal first reported that private equity companies were looking to buy Computer Sciences on Oct. 26.


Wall Street is sharply divided over the sale, given the disparity between the company’s lackluster earnings and its lofty $12 billion suggested purchase price. Institutional investors appear to be gunning for a sale, as CSC’s shares have jumped nearly 25 percent in the past two weeks, to a high of $59.30 a share.


Shares of CSC rose 4.1 percent to settle at $55 on Monday.

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