Investor reaction to Hewlett-Packard’s bid for technology outsourcer Electronic Data Systems has been less exuberant than you might expect for a $12.6 billion tech deal these days. The $19 billion Compaq purchase in September 2002 came shortly after HP touched its life-time low share price under $10 per share. The stock then proceeded to double in value to over $20 by the end of the year. HP shares fell nearly 5 percent late yesterday as perceptions of EDS as a lumbering fixer-upper did not merit a premium of as much as around 40 percent. “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,” said Jim Huguet, co-chief executive at Great Companies LLC. The party may still be coming, though, as the deal is seen sparking M&A in the IT services industry.

French bank Credit Agricole joined the growing list of lenders asking shareholders for billions of euros in extra cash while a trio of other European banks also revealed new scars from the credit crunch. Agricole, France’s biggest retail bank, announced a 5.9 billion euros ($9.1 billion) rights issue due to further writedowns at its Calyon investment banking arm of 1.2 billion euros during the first quarter. French rival Societe Generale, Belgian-Dutch group Fortis and Britain’s Alliance & Leicester also revealed combined writedowns of almost $3 billion as the impact of the U.S. housing market crisis and subsequent credit crunch spread further across Europe. After taking big hits, banks are asking shareholders to rebuild their capital cushion as the threat of further losses looms and banks’ ability to rebuild their balance sheet will be hampered by reduced earnings in coming years.

Westpac Banking launched a $17.6 billion all-share bid for smaller rival St George Bank in a tie-up that would create Australia’s biggest bank by market value. Analysts said the deal could trigger further consolidation in an Australian banking sector that, while dodging the worst of the subprime crisis, is still grappling with higher funding costs since the onset of the global credit crunch last year. Gail Kelly, Westpac’s chief executive who joined the bank less than four months ago after heading up St George for nearly six years, noted 2008 had brought a new world. “I left St George in August last year. That was a different time. Challenges in financial markets (are) very materially different now from then,” Kelly told journalists.

Finmeccanica of Italy has agreed to buy U.S. military contractor DRS Technologies in a $4 billion deal, the biggest so far in the European defense contractors’ bid for a slice of the growing U.S. weapons market. Finmeccanica said it would pay $81 a share in cash for DRS, a premium of about a third over the 30-day moving average of DRS’s stock price. Finmeccanica is 34 percent owned by the Italian state, and said it would pay for the purchase through a loan to be repaid through a capital increase, a bond issue and an asset sale. The cash price for DRS offers a premium of 32 percent over DRS’s 30-day average stock price. Finmeccanica plans to delist DRS, a maker of radar and surveillance equipment.

Corporate Express says it is willing to talk to U.S. office supplies retailer Staples after it raised its offer for the Dutch business products wholesaler. Staples raised its offer by more than 10 percent to about 1.46 billion euros ($2.3 billion), which Corporate Express has repeatedly rejected as too low. The Dutch firm said in a statement it was willing to talk to Staples about the revised offer and did not reiterate that Staples’ offer undervalued the company. Analysts said Staples may have to raise its bid again.

Other deals of the day:

* Emirates Telecommunications may compete with Mexican billionaire Carlos Slim and Russia’s Altimo for a $1 billion stake in India’s Tata Teleservices, al-Khaleej newspaper reported.

* Austrian vaccine maker Intercell bought Iomai Corp of the United States in a deal worth $189 million and also cut its first-quarter net loss.

* British credit information firm Experian said it had set up a 50-50 joint venture with Central Communication Bureau, a consumer credit bureau in Japan.

* Bank of Georgia, Georgia’s largest bank by assets, agreed to pay $34.2 million for a 70 percent stake in Belarusian Narodny Bank.