DXC rejects buyout proposal from Asian firm

Ashburn-based Fortune 500 company DXC Technology Inc. has ended buyout talks after a “financial sponsor” failed to raise enough capital, the company announced Monday.

DXC was approached in late September 2022 after receiving interest from a private equity firm and worked with advisers on the potential takeover, the company confirmed in October. While DXC did not name the company that approached it, Bloomberg reported that Baring Private Equity Asia was the interested party.

In a statement posted to its website Monday, DXC said that it would not comment further on the matter.

“Consistent with its fiduciary responsibility to maximize shareholder value, the company engaged in preliminary discussions and shared information with a financial sponsor,” the company said on its website. “Due to the financial sponsor’s challenges in raising the necessary capital, as a result of current market conditions, no formal proposal was received by the company and DXC has terminated the discussions.”

The Fortune 500 firm’s CEO, president and chairman, Mike Salvino, has said he is leading the technology services and consulting company through a multiyear “transformation journey” to become more focused and cost-effective. He was also Virginia’s highest-paid CEO in 2021, earning more than $28.7 million, a 32% jump over the previous year. But that pay has gone up while the company’s revenue has decreased. DXC posted $16.265 billion in 2022 revenue; it reported $17.729 billion in 2021. In February, the company reported $3.57 billion in revenue for the third quarter of fiscal 2023, down 12.8%, compared with the prior year period.

DXC stock price dropped with the news Tuesday, opening the day at $27.70 and ending at $26.47.