A bidding war is raging between IBM Corp and Hewlett-Packard Co in their attempt to extend their sphere of influence to include Groupe Bull SA. Hewlett-Packard is thought to have the inside track following Bull’s evaluation of its two suitors. It is said to have won both the business case and technical preference for its Precision Architecture RISC technology not only on technical merit, but out of fear, voiced even by its customer base, that an alliance with IBM would devastate the Bull culture. IBM, however is said to be pressing its suit with fervour, and is rumoured to be putting something in the region of $500m on the table to lure the troubled French company into its net. The sum, not all cash, is said to be more than Hewlett-Packard is ready to put up for a minority equity stake. To complicate a situation that is fast devolving into a political scuffle, Bull’s controlling shareholder, the French government, is believed to have thrown the semiconductor might of Thomson SA, another struggling French flagship outside the orbit of Groupe Bull, into the equation. The details of what is being proposed remain unclear but it is understood to involve putting business the way of SGS-Thomson Microelectronics NV, where IBM is already a big customer of the Inmos arm. A decision now rests with President Mitterrand himself. IBM appeared to be trying to exert further pressure late last week by leaking to the press that it had won – a claim that was apparently true at the time! IBM wants Bull to adopt high-end variants of its forthcoming PowerPC technology as the basis of its future development. But even with an alliance with Hewlett-Packard or IBM, however, it is not clear Bull can get back into a financial position that would satisfy any but the featherbedding French socialists.
