Hewlett-Packard confirmed yesterday that it was in talks to buy tech outsourcing company Electronic Data Systems Corp. According to Reuters, sources briefed on the matter put the price at around $12 to 13 billion.

The proposed deal is seen as bolstering HP's market position against market leader IBM. In light of the news, EDS shares rose nearly 28 percent before the close of the market yesterday. HP's shares dropped almost 5 percent.

EDS had a rough economic start to year, with a 62 percent profit drop in the first quarter. "EDS has been relatively stagnant over the past few years. HP has been trying to promote themselves as a major services organization over the past few years. This will certainly help them with that," Novarica analyst Chad Hersh told Reuters.