Written by Greg Roumeliotis and Milana Finn
(Reuters) – Acquisition company Apollo Global and Kendrell Holdings, an information technology services provider that has been spun off… IBM (NYSE:) is in talks about a joint bid for DXC Technology (NYSE:), people familiar with the matter said Monday.
Apollo and Kendrell discussed a takeover bid for DXC of between $22 and $25 per share, one of the sources said. DXC shares jumped after the news and ended trading in New York on Monday up 11% at $18.45, giving the company a market value of $3.3 billion.
DXC, also an IT services vendor, is separately requesting bids to sell its insurance software business for more than $2 billion and may choose to remain an independent company under Raul Fernandez, who was appointed CEO in February, the sources added.
The sources requested not to reveal their identity because the matter is confidential. DXC and Apollo declined to comment. Kendrell did not immediately respond to a request for comment.
DXC's business offerings include analytics and engineering that help companies manage their operations, as well as cybersecurity, cloud infrastructure and outsourcing.
The company's revenues took a hit over the past year, as high interest rates and concerns about the economic slowdown prompted many of its corporate clients to limit spending. Its shares have lost more than a third of their value over the past twelve months.
DXC responded to the slowdown with a series of cost cuts and restructuring initiatives. The company, based in Ashburn, Virginia, said it last held talks to sell itself last year, and that it ended those discussions after a private equity provider failed to raise the necessary financing.
Kyndryl, which specializes in IT services for infrastructure, is valued at $6 billion. Apollo, with $671 billion in assets under management, is one of the world's largest investors in private equity and corporate credit assets.