HP and Blackstone to bid for CSC?

Rumours are spreading around that HP, with the support of leading private equity group Blackstone, may be preparing a bid for CSC.

The idea seems to be that HP would initially take a minority stake in CSC, presumably with Blackstone taking the majority and if performance measures are hit then HP could end up buying Blackstone out over time and taking CSC over completely.

CSC could be worth around $12bn.

This looks like a potentially bold move for HP's new CEO and would be the first major acquisition since Fiorina left HP nearly a year ago. But it looks like a potentially shrewd move.

HP needs to bulk up more in enterprise services and CSC has great quality people, customers and contracts. The move would cement HP's position as the rightful global challenger to IBM. CIO's should benefit as well, as CSC could do with being part of a larger outfit.

The move also says a lot about HP's new CEO, Hurd. He is cautious and measured. Spreading the risk with Blackstone is something one would never imagine while HP was run by Fiorina, and they only get to take the group over if it performs. In the mean time they could start intergrating offerings and cross-selling HP and CSC services.

Well, we said that 2006 would be ther year of tech M&A, this could be great way to start.