Comdisco formally accepted Hewlett-Packard's US$750 million offer to buy its disaster recovery services business on Wednesday, leaving a rival $825 million bid from SunGard Data Systems Inc. in the dark.
Comdisco, in the middle of bankruptcy reorganization, is also in the middle of a battle between HP, SunGard and the U.S. Department of Justice (DOJ) over its disaster recovery business. HP and SunGard each have fought to acquire it, but the DOJ stepped in to oppose the SunGard bid on antitrust grounds. The U.S. Bankruptcy Court for the Northern District of Illinois postponed ruling on the proposed sale of Comdisco's Availability Solutions business after the DOJ filed a civil suit to block a SunGard win.
SunGard, Comdisco and IBM Corp. have a combined 80 percent of the disaster-recovery market, according to market research from Dataquest Inc.
The sale is subject to approval by the bankruptcy court, at a hearing scheduled for Nov. 7. Last week SunGard said it intended to fight the DOJ antitrust opposition, though a hearing about the matter was scheduled for Nov. 11, after the bankruptcy court session. A SunGard spokeswoman Wednesday had no comment regarding the signing of the agreement between Comdisco and HP, nor on the court date schedule. The DOJ was not immediately available for comment.
HP's $750 million offer earned the immediate approval of Comdisco's creditors, but not the approval of its equity committee. While the equity committee didn't want to leave an extra $50 million on the table -- after $25 million in deal cancellation charges go to HP -- the creditors saw the DOJ suit as a new risk factor and wanted the more immediate payoff, said sources close to the deal.