CSC Buyout Talks Break Down

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Shares of Computer Sciences Corp. fell as much as 13 percent on Monday following reports that potential buyers, including Lockheed Martin Corp., had ended talks to buy the El Segundo-based computer services company.


The Wall Street Journal reported over the weekend that talks with Lockheed and three private equity firms ended because Computer Sciences didn’t want to be divided into two pieces, as had been proposed last week.


The Journal first reported on the potential sale on Oct. 26. On Nov. 14, the newspaper said that talks had stalled over how to structure a deal with Computer Sciences and Lockheed. The two sides had roughly agreed to a price of about $65 a share, or $12 billion, but hadn’t reached a decision over how a deal would be carried out.


Computer Sciences was reported to have wanted 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, wanted to break CSC into two pieces that would be sold simultaneously, the Journal said. CSC apparently balked at the idea.


Shares of CSC fell 11.8 percent to settle at $48.38 on Monday.

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