INSTANT VIEW: HP in talks to buy EDS: source

NEW YORK (Reuters) - Hewlett-Packard Co (HPQ.N: Quote, Profile, Research, Stock Buzz) is close to a deal to acquire Electronic Data Systems Corp (EDS.N: Quote, Profile, Research, Stock Buzz) for between $12 billion and $13 billion, according to a source familiar with the matter.

Shares of EDS jumped 27 percent on the news, first reported by the Wall Street Journal, while HP shares slid 2.5 percent. Both stocks were halted, news pending.

COMMENTS:

ASHOK KUMAR, ANALYST, CRT CAPITAL GROUP:

"HP has always sought to gain critical mass on the hosting side. It would give Hewlett critical mass in the hosting solutions market instantaneously" (software as a service).

"It would put Hewlett-Packard in the sweet spot of an IT spending trend. It would definitely improve their position against IBM."

JIM HUGUET, CO-CHIEF EXECUTIVE AT GREAT COMPANIES LLC IN

TAMPA:

"Unless HP has some synergies where they can dramatically impact earnings growth of EDS, I'm not sure why they'd want to buy it. Earnings growth has averaged 2.8 percent, so it's not a major earnings growth company. Unless you can get that up in the 15 to 20 percent range, I'd question whether its a good decision.