Xchanging gets £480 million takeover offer from US buyer Computer Sciences Corporation

Dwarfed: US firm Computer Sciences Corporation has topped previous bids for Lloyds of London firm Xchanging

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9 December 2015

A US buyer landed a likely knockout blow in the four-way bid battle for a key player in the Lloyd’s of London insurance market with a £480 million offer today.

Xchanging, which provides back-office services to the insurance market, has been the subject of fierce takeover interest since the summer, when outsourcing giant Capita tabled its first 140p a share takeover offer.

Virginia-based Computer Sciences Corporation has won over the Xchanging board with a 190p a share bid — a 72% premium to the share price when the bid interest was announced — beating private equity firm Apollo and insurance software firm Ebix, as well as Capita.

Xchanging — a former sponsor of the Boat Race — appeared to call time on the race as it said the CSC bid represented “a superior offer for Xchanging shareholders, as compared to other offers” on timing and risk grounds as well as value.

It also withdrew its recommendation of a lower Capita bid.

But shares in the company rose 9% or 16p to 192p — signalling that the City thinks that another bidder could yet raise their offer.

Xchanging floated in 2007 at 240p a share but was hit by concerns over its accounting and in 2011 issued a shock profit warning which cut the company’s value in half.

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Xchanging gets £480 million takeover offer from US buyer Computer Sciences Corporation

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