SunGard up for sale In a stock market and media announcement issued yesterday SunGard stated: “SunGard, a global leader in integrated software and processing solutions primarily for financial services and the pioneer and leading provider of information availability services, announced today that it is in discussions concerning a possible purchase of the entire company. “SunGard’s Board of Directors has authorized its advisors and management to engage in these discussions, while at the same time proceeding with the planned spin-off of the company's Availability Services business, which was announced last fall. The Board’s advisors are Credit Suisse First Boston and Shearman & Sterling LLP, which had already been retained in connection with the spin-off. SunGard does not intend to comment on any specific discussions or any potential transaction unless and until it enters into a definitive agreement with respect to a transaction. There can be no assurance that these discussions will result in any transaction for a purchase of the company.” Speculation following the announcement was rife, but the general consensus seemed to be that the acquisition would be for around $10 billion and that it was being led by Silver Lake Partners, with other venture capital backers and investing firms. The stock market responded positively to the news, with SunGard shares closing up 24.5 percent on the New York Stock Exchange. What does all this mean for the business continuity market? The spin-off of SunGard Availability Services appears to have given positive impetus to the division in recent months but yesterday’s announcement may lead to a period of uncertainty and lack of clear vision of the way forward, at least until the acquisition is complete. It is not known yet whether the sale of SunGard will include SunGard Availability Services; however the announcement raises the very real possibility that it will and that SunGard Availability Services will remain, at least for some time, as part of a more diverse company. This may result in the advantages of the spin-off being lost. There is also the strong possibility of a counter bid for SunGard Availability Services. The division makes a very strong standalone company in a growing market. It must be an attractive target for the larger information technology players and for general investment companies. Looking further ahead, it may be that SunGard is acquired in its entirety but that SunGard Availability Services is then sold off at a later stage as a highly lucrative piece of profit taking by the new investors.
•Date: 22nd March 2005 • Region: N.America/World •Type:
Article •Topic:
BC markets |
