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Reuters Sources Indicate Apollo and Kyndryl To Bid For DXC Technology

TECHNOLOGY

Rating: Baa2[N]/BBB-/BBB


  • Reuters Sources report that Apollo and Kyndryl are discussing a joint bid for DXC Technology at USD 22-25/share. DXC shares rose 11.5% to USD 18.45 giving a market value of USD 3.3bn.
  • DXC is reportedly considering separate bids of more than USD 2bn for its insurance software business and CEO Raul Fernandez might keep DXC independent.
  • As previously covered, DXC performance has been poor in recent periods with their equity touching -33% YTD last week. Their last earnings in May saw EUR spreads widen on weak FCF guidance. Cost cuts and restructuring ongoing.
  • Atos tried and failed to bid for DXC back in 2021.
  • DXC also had its outlook revised to negative by Moody’s yesterday (unrelated to the RTRS report).
  • Their USD 28s looks to have tightened right at the US close. EUR bonds streaming mixed in early trading; docs indicate requirement for issuer to repurchase at 101 on change of control.

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