Newspaper article THE JOURNAL RECORD

Sprint, EDS Seek Partnership Instead of Merger

Newspaper article THE JOURNAL RECORD

Sprint, EDS Seek Partnership Instead of Merger

Article excerpt

DALLAS (AP) _ The merger that never was now really isn't.

Electronic Data Systems Corp., a big provider of computer services, and Sprint, the No. 3 long distance phone company, said Monday they had called off merger talks, saying they could not agree on financial terms.

The two companies three weeks ago formally announced they were talking, forced by anonymously sourced news accounts to respond to speculation that had been growing for months.

The companies acknowledged Monday they were pushed to go public before they had resolved key issues, including financial terms. But even their vague statement at that time triggered a round of news stories heralding a rosy, lucrative future of technology and telecommunications.

"It's not a divorce. They were never married," said Peter Bernstein, senior vice president of research for Probe Research in Cedar Knolls, N.J.

"These are people who hadn't even picked out their pattern yet, or the hall or the caterer. And the press wanted them standing up at the altar saying, `Does anybody object?' It doesn't work that way," he said.

In a joint statement, EDS and Sprint said they were "no longer considering a merger of equals, but are continuing to explore other forms of a strategic relationship." They were not specific.

EDS, a unit of General Motors Corp., is the largest provider of computer services, designing and implementing sophisticated systems regardless of their make. In addition to its long distance business, Sprint is active in other telecommunications areas.

Sprint spokeswoman Susan Kraus said the merger talks ended because the companies couldn't agree on an acceptable exchange ratio for a stock-to-stock merger.

"The ratio proposed by EDS was unacceptable to us, and the exchange ratio we proposed was unacceptable to EDS," she said.

Neither she nor EDS were specific, however. …

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