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December 4, 1991


By CBR Staff Writer

News that a consortium is being put together to make an agreed bid for floundering Unisys Corp turns out to be no news at company headquarters in Blue Bell, Pennsylvania, where we hear there have been whispers doing the rounds for some time – and, embarrassingly, chief executive James Unruh was a long way from being the first to know. Biggest surprise, sources close to the company say, is that the computer company involved in the consortium is not, despite the apparently informed speculation, Japanese, but is none other than that latterday snapper-up of unconsidered trifles, Digital Equipment Corp, which has already picked up the unwanted Mannesmann-Kienzle GmbH and Philips Information Systems. Word is that DEC would initially come in for not more than 30%, leaving a big gap in the financing, and the whisper among the birch groves at Blue Bell is that a financially-oriented multinational has been brought in to fill the gap. The same sources say that the price being considered is $750m plus assumption of debt and preferred stock totalling $3,700m now that Unisys has failed to divest its Paramax defence electronics unit. With mention of Paramax, the story moves down to Washington, where word is that the name of US Defense Secretary Dick Cheney can be added to those of Lord King, ex-IBMer Edgar Neufeld, and Massachusetts Institute of Technology professor Kenneth Smith. It seems that Cheney is sufficiently worried about the future of a company that remains a major supplier of the Pentagon and other US government departments that he has given the proposed HTIC consortium his active blessing – and may even be ready to retire from government to head Paramax or another part of the firm. The leap in the share price on the original USA Today story may have been overdone – at $5 a share, the company is valued $800m, rather more than the consortium appears to be ready to pay for the common stock. The whole thing is very far from being a done deal, and the consortium does have something of the air of the quixotic attempt by Plessey Co to rally a consortium to launch a break-up bid for GEC Plc when Plessey was trying to escape from GEC’s bear hug. Nor, say nervous Unisys people, is there any indication of what degree of dismemberment of the company is intended should any takeover offer be successful.

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