Shares in Electronic Data Systems (EDS) have risen 28% on reports it is close to being bought by Hewlett-Packard (HP) for between $12bn (Ј6.1bn) and $13bn.
The report in the Wall Street Journal citing unnamed sources said that the deal will be announced soon, possibly on Tuesday.
EDS is a Texas-based information technology services company, of which HP is among the biggest customers.
HP shares did not fare as well, falling 4.5% on the reports.
"Unless HP has some synergies where they can dramatically impact earnings growth of EDS, I'm not sure why they'd want to buy it," said Jim Huguet of Great Companies in Tampa.
"Earnings growth has averaged 2.8%, so it's not a major earnings growth company."
But other analysts saw the potential deal as a chance for HP to become a big IT services provider.
"EDS has been relatively stagnant over the past few years," said Chad Hersh from Novarica.
"HP has been trying to promote themselves as a major services organization over the past few years.
"This will certainly help them with that."
(BBC)
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