EDS Says Seeks South Africa Buy, But Not Didata

EDS South Africa on Tuesday said it was looking for a local acquisition but denied what it called market rumor that it might buy the country's biggest technology company Dimension Data.

"EDS is, financially, well placed to consider an acquisition as part of its local growth strategy...but Dimension Data does not form part of our plans at this stage," EDS South Africa chairman Michael Minassian said in a statement.

EDS South Africa spokesman Charles Webster said the group has received a number of calls from "business contacts and journalists" concerning a possible offer for Didata, which has seen its share price tumble close to four-year lows in the past two weeks after it warned of lower annual operating margins.

Didata's share was little changed on the news, trading down 3.7 percent in Johannesburg, in line with weaker technology stocks in other markets.

Didata and many analysts say the announcement was the first they had heard of the so-called rumor.

"I've never heard of it," says Didata spokesperson Karen Cramer, adding the group's lower share price could be to blame for any takeover talk.

"I hadn't even heard it," an analyst says. "EDS South Africa was probably just trying to get some news space."

"Their model is very different from Didata's," another analyst says. "They are a pure outsourcing company and I wouldn't pay too much attention to this."

"EDS is primarily a services company and would not want to purchase a product resale-driven operation,' Minassian says.

About 60 percent of Didata's revenue comes from hardware sales.

EDS South Africa is part of U.S. computer services group Electronic Data Systems. Webster would not give local revenue figures, but says EDS South Africa employed 1,200 people, compared with its parent's worldwide total of 120,000.

He also declined to give details of EDS South Africa's likely local acquisition targets.

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