Xchanging (XCH) must feel like the belle of the ball. In the past three months, outsourcing giant Capita, private equity titan Apollo Global Management, US software group Ebix and IT infrastructure specialist Computer Sciences Corporation (CSC) have all expressed interest in acquiring the business services provider. Spoilt for choice, Xchanging's directors haven't shied away from breaking hearts: after agreeing a deal with Capita, they've now switched their support to CSC.
Management consider CSC's bid of 190p in cash per share - 19 per cent higher than Capita's proposal - to be the better option for investors. It represents a hefty 72 per cent premium to Xchanging's share price before management revealed it was in talks with both Capita and Apollo. The latest twist in the tale sent Xchanging's shares up a tenth to 193p; they've risen about 60 per cent since early October.
Xchanging offers expertise and leading software products to commercial insurers. A deal promises to deepen CSC's foothold in the global insurance market and strengthen its range of software, outsourcing and IT services. CSC's management also hopes to capitalise on Xchanging's capabilities in wealth management outsourcing, infrastructure and applications. And it expects to realise around £50m-£60m in annual cost savings within 18 months of the deal closing.
