By Mike Stone and Nadia Damouni
(Reuters) - Technology consulting services provider Computer Sciences Corp (N:CSC) is planning to separate its government business from its commercial information technology division, people familiar with the matter said on Thursday.
An announcement on CSC's plans could come as early as next week, when the company announces its fiscal 2015 earnings on May 19, the people said. It follows several attempts by CSC, which has a market capitalization of more than $9 billion, to sell itself over several years.
The company is in the midst of a cost-cutting campaign, and also faces sequestration and budget pressures from the U.S. government.
While CSC is still open to acquisitions, it now sees a split, whereby its shareholders would also get shares in a new company, as the most attractive and tax-efficient transaction to pursue, one of the people said.
The sources asked not to be identified because the deliberations are confidential. CSC declined to comment.
The company's shares were up 4 percent at $67.18 in afternoon trading in New York, after earlier jumping as much as 7.1 percent.
In recent months, CSC drew buyout interest from French consulting company Cap Gemini SA (PA:CAPP), computer maker Hewlett-Packard Co (N:HPQ) and Canadian consulting firm CGI Group Inc (TO:GIBa), as well as private equity firms, yet none of them could meet CSC's valuation expectations, one of the people said.
Representatives for Cap Gemini, HP and CGI did not immediately respond to requests for comment.
Hedge fund Jana Partners LLC disclosed a 5.9 percent stake in CSC in February and said it would continue talks with the company about strategic alternatives and its board composition.