“Dell Inc. plans to buy the technology services company Perot Systems Corp. for about $3.9 billion as it tries to expand beyond the PC business and compete more aggressively with Hewlett-Packard Co. – which also recently bought a tech-services company founded by H. Ross Perot,” Andrew Vanacore reports for The Associated Press. “Dell said it will offer $30 per share in cash for Perot Systems- a 68 percent premium over its closing price Friday. Perot Systems’ shares rose $11.73, or 65 percent, to $29.64 in morning trading. Dell shares fell 80 cents, or 4.8 percent, to $15.89.”
“Former presidential candidate H. Ross Perot Sr., now 79, serves as chairman emeritus of Perot Systems, which he founded in 1988. He earlier had made a fortune from founding Electronic Data Systems Corp. in 1962 and selling the company to General Motors Corp. in a 1984 deal worth $2.5 billion,” Vanacore reports. “Hewlett-Packard bought EDS last year for $13.9 billion.”
Dell’s “revenue comes mainly from the hard-hit PC business, while competitors like HP have a wider set of products and services. As a result Dell’s profits have been slumping, down 23 percent in the second quarter,” Vanacore reports. “Following the acquisition, which is expected to close by the end of January, Perot Systems would become Dell’s service unit. Dell said it expects additional acquisitions to expand on the business but emphasized that it is looking to hold on to Perot management, including CEO Peter Altabef. Ross Perot Jr., the chairman of Perot’s board, will be considered for a director slot at Dell, the company said.”
Full article here.
[Thanks to MacDailyNews Reader “Tom L.” for the heads up.]
“Sounds like desperation to me… besides how can a company that is losing money afford to spend that kind of money on let another loser?”
It’s a dog-eat-dog world!