EDS Bids for Financial Services Firm

Computer services giant EDS has offered to buy financial services consulting firm Policy Management Systems in a cash deal worth about $708 million, surpassing a bid from investment firm Welsh, Carson, Anderson & Stowe.

In a proposal letter sent to Policy Management’s board Friday, EDS said it could offer the company’s shareholders a “more compelling proposal.” EDS offered to buy 100 percent of the firm’s common stock for $18 to $20 per share in cash, which is a premium of roughly 30 to 40 percent over the current bid and approximately 50 to 67 percent over Policy Management’s current trading price.

Based on roughly 35.4 million shares outstanding in December, the cash deal would be worth as much as $708 million. In the letter, EDS asked Policy Management for a response by the end of business Tuesday.