BT presses for control of EDS

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The Independent Online
BT HAS ruled out taking a minority interest in Electronic Data Systems, and will announce soon whether it will buy a controlling stake in the world's largest computer-services firm, according to a leading US trade publication.

BT has been engaged in talks about buying the stake with EDS, a subsidiary of General Motors, for more than a month. According to an unnamed EDS executive quoted by Information Week, BT officials in London last week would not discuss buying less than 50 per cent of the company. An announcement is expected soon, but spokesmen for both companies refused comment yesterday.

But control of EDS - as opposed to a minority stake - would expose BT to potential liabilities, notably any award from a legal battle EDS is waging with Computer Associates, a New York software company. EDS sued Computer Associates, a supplier, in January 1992 for dollars 15m for alleged breach of contract, and CA several days later filed a dollars 2bn suit against EDS for alleged misappropriation of software.

To date, the judge hearing the case has rejected CA's attempts to dismiss EDS's charges, and no trial date has been set.

A CA spokesman warned yesterday that it would pursue its lawsuit against any successor company. 'Whoever owns EDS also owns its liabilities,' the company said.