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HP rebuffs would-be buyers
Yesterday, this column commented on reports that PC manufacturer Dell (DELL.DL) is in talks with a leveraged-buyout group to take the company private. It appears that the possibility of such a transaction may have emboldened other potential acquirers, as Dell's rival and Dow component Hewlett-Packard (HPQ 0.11%) has also received expressions of interest for parts of its business -- inquiries the companies firmly rebuffed.
In its latest annual report, released three weeks ago, HP added to the "Risk Factors" section that it continues to evaluate the potential sale of businesses that it considers noncore. The risk? "We may also dispose of a business at a price or on terms that are less desirable than we had anticipated," it specified.
According to the reports, the expressions of interest concerned HP's services division and its troubled Autonomy unit. Both are the products of acquisitions that triggered multibillion-dollar writedowns in 2012. (HP's services division was built around its $14 billion acquisition of EDS in 2008.)
Selling either of these activities would amount to buying high and selling low, so the company may naturally be reluctant to make this open admission of failure (although it's certainly not unheard of in the annals of corporate America). However, recall that HP's CEO, Meg Whitman, wasn't on the job when the company made these acquisitions; she's working with a clean slate (although she was on the board that approved the purchase of Autonomy). In fact, Whitman nixed the plan to hive off HP's PC division a month into her tenure as CEO. Which raises the question: If none of these activities is noncore, what, if anything, is HP interested in selling?
