Technology consulting company Computer Sciences Corp (CSC) will buy Xchanging Plc for about £480 million ($721 million), the companies said, beating out other suitors in a bidding war for the insurance-focused outsourcing company.
The cash offer of 190 pence [$2.86] per share represents a premium of about 72 percent to Xchanging’s closing price on Oct. 2, the day before the offer period commenced.
Shares in Xchanging surged about 9 percent to a nearly 15-month high of 192 pence [$2.89], indicating that some investors are still expecting a higher bid for the company that has been pursued by four firms up to this point.
Xchanging, which offers services ranging from back-office invoice processing to insurance claims settlement, said its board intended to unanimously back the CSC offer and would withdraw its recommendation of a 160 pence [$2.41] offer from its larger rival Capita Plc.
The British company has seen interest from a number of suitors, including Capita, insurance software maker Ebix Inc. and U.S.-based private equity investor Apollo Global Management LLC, which dropped out of the race last month.
CSC’s current offer is higher than its initial proposal of 170 pence [$2.56] per share, and higher than the lastest bid, Ebix’s potential offer of 175 pence [$2.63] per share.
The deal will give CSC much sought after access to Xchanging’s lucrative insurance business and Xuber software, which caters to the Lloyd’s of London insurance market.
(Reporting by Esha Vaish in Bengaluru; Editing by Gopakumar Warrier)
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