Hewlett-Packard (HP) announced that it has increased its bid for Comdisco's Availability Solutions Business unit from $600 million (earlier this summer) to $750 million. Although this new bid isn't higher than SunGard's $825-million offer for the unit, it has a better chance of success because the US Department of Justice (DOJ) filed a lawsuit attempting to block SunGard's attempted acquisition last week. SunGard calls the DOJ complaint baseless and ill-advised, and has vowed to vigorously defend its acquisition. The DOJ has filed a motion for a preliminary injunction in the case.
A bankruptcy court hearing that was scheduled for October 23 to finalize bids for the Comdisco unit has been rescheduled for November 7. Comdisco's board of directors has approved HP's new bid and, according to HP, antitrust regulators have already approved the bid as well.
SunGard hasn't given up yet, however. The company is exploring ways to complete its acquisition, including increasing its bid. SunGard is also confident that it will prevail in court, and the company hopes to resolve the case as quickly as possible. SunGard Chairman and CEO, James L. Mann, notes that, "In light of the recent attacks on America's infrastructure, it is contrary to public policy for the government to oppose a transaction that obviously will strengthen the ability of SunGard and Comdisco to service the nation's disaster-recovery needs. Now, more than ever, our country needs a vital and capable business continuity industry. With Comdisco in bankruptcy and its Availability Solutions division continuing to support companies devastated by the terrible events of September 11, a prompt resolution of this antitrust challenge is critical."