US Edition 
American bidder enters the fray in fight to take over Xchanging
Computer Sciences Corporation, which already has a British IT business, hopes to trump Capita's £400m offer
An American IT group has made a late bid for Xchanging, the ailing outsourcing firm that has already recommended an offer from Britain's Capita.
Xchanging’s shares jumped 7pc after Computer Sciences Corporation, a New York-listed group with 70,000 employees, approached the company with a £421m proposal.
CSC’s plan to buy the firm for 170p in cash would outbid Capita’s 160p package, and falls in line with an earlier approach tabled by the private equity group Apollo, which was withdrawn earlier this month.
Xchanging, which has spent several months in talks with various suitors, said it will continue discussions with CSC about its intentions. The company's shares ended the day above both offers currently on the table as the market priced in the possibility of a bidding war.
Shares in Xchanging had fallen to less than 100p before the prospect of a sale, following several tough years in which the firm struggled to transform itself from a traditional back-office provider for the insurance industry into a corporate data and analytics specialist.
In July, the firm announced the departure of its chief executive, Ken Lever, who joined following a profit warning in 2011 and will leave at the end of the year. FTSE 100-listed Capita first approached the firm with its takeover plan in August.
In October, the board recommended a deal from Capita, which has pledged to cut £35m in overlapping costs following a takeover. However, they left the door open to competing bids by saying they could withdraw support if a higher offer emerged before Capita’s deal was finalised.
CSC could also offer synergies and cost savings. The group has about 6,500 employees in its UK consulting and IT business, which runs services for 80pc of all NHS trusts and large corporations including BAE Systems, Lloyds Banking Group and Diageo.
The US parent group, which has a market value of more than $9bn, is this month spinning off its American public sector business to form a separate $4bn company.
"Xchanging shareholders who have not already accepted Capita’s offer for Xchanging announced on October 14 are urged not to accept Capita’s offer. CSC will make a further announcement in due course," the company said.