31 May 12. Canada’s CGI offers £1.7bn for Logica. The board of Logica has unanimously recommended a £1.7bn all-cash takeover approach from Canada’s CGI Group, making the IT services company the third UK
tech business to be acquired by a North American peer in a year. The struggling company, which has announced plans to close businesses in Sweden and the Benelux regions, said CGI’s offer of 105p per share – a 60 per cent premium over its share price at the close of trading yesterday – represented good value for its shareholders. Shares in Logica have lost more than half of their value in the past 12 months following two profit warnings and a restructuring that included the axing of 1,300 staff. On Thursday, however, they rose 65 per cent to 108p in morning trading in London, a slight discount to the offer price suggesting a counterbid is unlikely. CGI was founded in 1976 and is based in Montreal. It employs 31,000 and reported revenues of $4.3bn last year and has a market capitalisation of C$5.4bn, based on Wednesday’s closing market price. The company generates most of its profits in North America but is keen to expand into Europe’s €200bn a year IT services industry. Logica makes most of its income from the eurozone and earlier this month reiterated its outlook for the year. (Source: FT.com)
01 Jun 12. EADS considers push into banking. EADS, the European aerospace group, is considering the idea of forming its own bank in response to financial sector instability brought on by the deepening eurozone debt crisis. The group, parent of Airbus, said it was “looking into the pros and cos” of having a banking licence. It said: “This is one of several options. The feasibility study is still ongoing.” A flurry of downgrades in the banking sector has left EADS with a better credit rating than some of the banks with which it does business, leading the group to consider whether it should build in-house banking functions to park cash and manage currency hedging. The financial crisis has thrown a spotlight on the banking arms of a number of industrial companies in Europe, showing how they have become both a powerful financing tool and a means of helping customers sidestep the tougher conditions imposed by mainstream banks. Industrial companies with full banking licences such as Siemens have also been able to use the facilities of the European Central Bank and take part in some of its crisis alleviation measures, such as its granting of unlimited three-year loans. (Source: FT.com)
31 May 12. SAIC, Inc. (SAI)announced financial results for the first quarter of fiscal year 2013, which ended April 30, 2012. Revenues for the first quarter of fiscal 2013 were $2.78bn, up 3 percent from $2.69bn in the first quarter of fiscal year 2012. Internal revenue growth represented 2 percent of the consolidated revenue growth. Operating income for the quarter was $208m (7.5 percent of revenues), down from $230m (8.6 percent of revenues) in the first quarter of fiscal year 2012. The reduction in operating income was attributable to increased indirect spending, including bid and proposal costs; an $8m reduction in net positive changes in contract estimates; and a $6m gain on the sale of real estate in the prior year quarter. Income from continuing operations for the quarter was $117m compared to $130m in the first quarter of fiscal year 2012. This decline in income from continuing operations was attributable to the reduction in operating income described above, partially offset by a lower effective tax rate. Diluted earnings per share from continuing operations for the quarter were $0.35, down 3 percent from $0.36 in the first quarter of fiscal year 2012. The diluted share count for the quarter was 330m, down 5 percent from 348m in the first quarter of fiscal year 2012.
31 May 12. Italy’s Finmeccanica has agreed to sell its stake in aero-engine parts maker Avio to a state-controlled fund as it presses ahead with plans to sell around €1bn ($1.24bn