Buyout talk helps Unisys
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February 16, 2001: 1:24 p.m. ET
Information services provider focus of takeover speculation
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NEW YORK (CNNfn) - Information services provider Unisys Corp., whose share price has doubled since last summer amid takeover speculation, may be in talks about a possible buyout, press reports said Friday.
International Business Machines and Germany's Deutsche Telekom may in the running to buy Blue Bell, Pa.-based Unisys, according to the reports.
Both Unisys and Armonk, N.Y.-based IBM (IBM: Research, Estimates) declined to comment. Deutsche Telekom (DT: Research, Estimates) could not be reached for comment.
Business Week, quoting analysts, said a Unisys acquisition would boost IBM's presence in the fast growing areas of software, services and maintenance. Unisys could fetch as much as $9.5 billion, or $30 a share, analysts quoted in the Business Week article said.
The takeover speculation appears to have helped Unisys survive the recent brutal technology sell-off even after issuing several earnings warnings in 2000. Its shares, which have doubled since hitting a low of $9.12 in July, gained 95 cents to $19.42 in midday trading Friday.
On Jan. 18, Unisys (UIS: Research, Estimates) reported a lower fourth-quarter profit and said its revenue growth for 2001 will be at the low end of expectations.
A Unisys source familiar with the situation said the rumors of a takeover have been circulating for nearly two years. "The story is news to us," the source said. "We've seen many, many stories and Deutsche Telekom has been subject of many of them as is IBM."
But Reuters, citing an analyst, said Deutsche Telekom AG would be an unlikely buyer since it was not in a position to take on more debt.
An IBM source said the speculation seems to pop up on a regular basis.
American depositary shares for Deutsche Telecom lost 77 cents to $24.84, while IBM dropped $1.68 to $115.10.
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