CGEY Still Undecided About Transiciel Acquisition.

Paul Hermelin, CEO of Cap Gemini Ernst & Young, is still undecided about whether to pursue the acquisition of local rival Transiciel SA.

Speaking on a conference call at the time of the company's first-half results, Hermelin said: "The management of Transiciel is very keen on some form of reunification and I am far more cautious on that. I will be looking at their performance."

Boulogne-based Transiciel was initially formed as a spin-off from CGEY's body-shopping arm Sogeti, and Hermelin said: "Sogeti is a good business. It is our best margin and always has been, and we should not exclude acquisitions."

Speculation about a possible acquisition surfaced following Paris, France-based CGEY's decision to raise some 460m euros ($529m) in debt in late June. Hermelin pointed out that the capital increase was to improve the company's cash position, which grew to 419m euros ($478m) at the end of the first half, up from 247m euros ($282m) in 2002, and maintains, "there were and are no burning acquisitions."

However, Hermelin dismissed outright other recent rumors that have surfaced around the company in recent weeks, notably the speculation that Hewlett-Packard Co is preparing to launch an acquisition bid for CGEY. "It so happens that I talk regularly with a west coast-based manufacturer about our alliance, it happens to be a lady if you know what I mean. I asked her if that is the right discussion we should be having, and the conclusion I drew is that she did not intend to bid for CGEY, but she can change her mind. So for the time being all discussions between CGEY and HP are about our operational alliance," he said.