HP to challenge sale of Comdisco unit to SunGard

Hewlett-Packard Co. today said it plans to challenge Comdisco Inc.’s decision to sell its disaster recovery unit to financial services company SunGard Data Systems Inc., saying the deal would be anticompetitive.

HP made the statement after Comdisco, a Rosemont, Ill.-based technology equipment leasing firm, said today it had agreed to sell its technology services division, known as Availability Solutions, to Wayne, Pa.-based SunGard for US$825 million.

Suffering from the downturn in the economy, Comdisco filed for bankruptcy in U.S. court in July, saying it was selling its technology services business unit to HP for US$610 million, although the deal was conditional on “higher or otherwise better offers.” Any other offer beside HP’s offer had to be made during the court-authorized auction, according to Comdisco spokeswoman Mary Moster.

Comdisco’s agreement with SunGard came after that auction and is subject to approval by the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago, which will hold a hearing Oct. 23.

In August, SunGard’s offered US$775 for Comdisco’s technology services unit. But Moster said because Comdisco could only accept offers that had been made in the bankruptcy court auction, it couldn’t accept SunGard’s bid.

It’s not clear why SunGard’s final bid was US$825 million, US$50 million more than its initial offer. Another company may have made a higher bid than SunGard’s initial bid, but Moster said she couldn’t comment because the bids submitted during the auction were confidential.

In a statement, HP said the U.S. Department of Justice (DOJ) was investigating the proposed sale to SunGard.

HP also said the DOJ decided not to open an investigation into its proposed acquisition of Comdisco. In its statement, HP stressed that its bid to acquire Comdisco was pro-customer and pro-competition.

The DOJ couldn’t be reached for comment.

Moster said Comdisco was aware of the DOJ’s investigation. “We have the support of the Official Creditors’ and Equity Committees, and Comdisco concluded that SunGard’s offer was the highest or otherwise best offer,” Moster said. The committees represent Comdisco’s creditors.

HP, however, disagreed.

“[HP] expects to be confirmed the successful bidder and to participate in the Oct. 23 bankruptcy court sale, and it expects to be confirmed the successful bidder given the anticompetitive nature of SunGard’s proposed acquisition,” the company said in the statement. HP officials couldn’t be reached for further comment. The company planned to integrate most assets of Comdisco’s technology unit into the HP Operations segment of its HP Services division.

SunGard spokeswoman Kelly O’Brien said it was SunGard’s policy not to comment on the competition. She also said the company wouldn’t speculate on the bankruptcy court proceedings because it is an ongoing process.

“We are confident our bid will prevail and we look forward to closing as soon as possible,” she said.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now