Computer Sciences Corp to break up

330Technology consulting services provider Computer Sciences is planning to separate its government business from its commercial information technology division.

Word on the street is that an announcement could come next week, when CSC releases its fiscal 2015 earnings on May 19.

CSC has been trying, without much luck, to sell itself. The company has a market capitalisation of close to $9.5 billion.

The company is  cost cutting like a mad thing as the US government cut back on its services. However, its government business is seen as attractive to potential buyers because of the high barriers to entry for competitors.

While CSC is still open to acquisitions, it now sees a split in which shareholders would also get stock in a new company as the most attractive and tax-efficient transaction to pursue.

Buyout interest had come from Cap Gemin, HP and Canadian consulting firm CGI as well as the usual sharks from private equity firms. However CSC wanted more money than they wanted to pay.

Hedge fund Jana Partners disclosed a 5.9 percent stake in CSC in February, and said it would continue talks with the company about strategic alternatives and the composition of its board.