EDS Negotiations to Sell Unit Fizzle
Negotiations to sell Electronic Data Systems Corp.'s A.T. Kearney management-consulting unit collapsed after the sole bidder withdrew.</br></br>Monitor Group, a Cambridge, Mass., consulting firm, said two months of analysis and talks couldn't produce a deal acceptable to Monitor, EDS and Kearney partners. "We didn't see that there would be enough free cash flow, especially in the early years," a Monitor spokesman said.</br></br>The breakdown in talks increases the likelihood that EDS may have to write down assets associated with A.T. Kearney, said Cynthia L. Houlton, an analyst at RBC Capital Markets, a unit of Royal Bank of Canada. EDS reported assets associated with Kearney of $276 million as of June 30.</br></br>"I don't think people are lining up to take the place of the Monitor Group," she said. Ms. Houlton doesn't own shares in EDS, and rates the stock "sector perform." RBC Capital Markets doesn't provide investment-banking services with EDS.</br></br>News of the deal collapse was reported on Crain's Chicago Business Web site.