Hewlett-Packard is supposed to be thisclose to buying Electronic Data Systems for somewhere in the heady neighborhood of $12 billion-$13 billion, according to the Wall Street Journal, a pretty premium over its $9.5 billion market cap Friday.
The paper thinks there could be an
Buying the consultant is meant to help HP
compete on the services side against rival IBM.
HP did about $16.6 billion in services last
year and earned $1.8 billion on it. EDS had revenues of $5.8 billion.
IBM did about $57 billion in services,
earning $5.6 billion.
HP hasn’t spent the kind of money they’re
talking about since it bought Compaq for $20 billion. It would be CEO Mark
Hurd’s biggest buy since he arrived at HP.
The company bought Mercury Interactive for
$4.5 billion in 2006.
During her sojourn at HP, Carly Fiorina tried
to PriceWaterhouse’s consulting arm for a reported $19 billion and failed. IBM
later picked it up for a song.
HP reports its latest quarter on Thursday.