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CSC Stock Jumps on Bid Report

November 02, 2005|From Associated Press

Shares of Computer Sciences Corp. jumped 13% on Tuesday after a newspaper reported that Lockheed Martin Corp. and three private investment firms were considering making an offer of about $12 billion for the information technology outsourcing and consulting company.

Lockheed and the firms have discussed a bid of $64 to $65 a share in early-stage negotiations with El Segundo-based CSC, the Wall Street Journal reported Tuesday.

Lockheed, based in Bethesda, Md., would buy CSC's government contract business. The investment firms -- Texas Pacific Group, Warburg Pincus and Blackstone Group -- would acquire CSC's corporate customer business, the Journal reported.

The reported price exceeds the $42.31-to-$58 range in which CSC's shares have traded in the last year. CSC rose $6.75 to $58 on Tuesday. Lockheed shares fell 61 cents to $59.95.

Tom Jurkowsky, a Lockheed spokesman, said the company would not comment on "rumored acquisitions, divestitures and mergers." A CSC spokesman also declined to comment.

A deal for CSC's government contract business would bolster Lockheed's growing stake in information technology, an area in which the defense company has said it plans to spend $3 billion to $4 billion on acquisitions.

"They obviously are looking to expand a profitable part of their business that is much more predictable than the weapons business," said Paul Nisbet, an analyst with JSA Research.

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