HP Shares Jump On Report Of Board Mulling Breakup
While such a development would dramatically alter the IT industry landscape, the murky picture emerging from the Quartz report suggests it won't be happening anytime soon. HP's board has not set up a special committee to officially examine breakup scenarios and isn't planning to do so, according to the report, which also says HP's board may decide to leave the company as-is.
An HP spokesperson contacted by CRN declined comment, citing the company's policy of not responding to rumors or speculation.
[Related: HP Launches Pavilion 14 Chromebook, Pushes 'Multi-OS' Strategy ]
A source familiar with the company's plans said HP is not planning a breakup and intends to keep all of its core business in-house under the "One HP" flag, which CEO Meg Whitman has steadfastly waved since taking over as CEO in September 2011.
HP investors sure seem to like the breakup idea, as HP shares rose 64 cents to $17.25 in after-hours trading Tuesday. Many Wall Street analysts have been calling for HP to be broken up into separate divisions for enterprise and consumer products.
In HP's 2012 10-K filing in December, the company raised eyebrows by revealing its intention to "evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives." HP didn't include this language in its 2011 10-K, making it seem as though it was setting the stage to shed underperforming business units.
Last September, HP shopped its Electronic Data Systems (EDS) outsourcing business to potential buyers, including private equity firms, but was unable to find a buyer, sources told CRN at the time.
Last month, The Wall Street Journal reported that HP had been approached by suitors interested in buying EDS and Autonomy, presumably for much less than the $25 billion HP spent to acquire them. Earlier Tuesday, HP trashed Dell's $24.4 billion private equity deal, claiming its "significant debt load" will hurt its rival's ability to invest in new products and services.
PUBLISHED FEB. 5, 2013