HP considering company 'breakup,' says report

Board of world's No. 1 supplier of PCs by shipment is reportedly looking at options to "obtain maximum value for shareholders." One of those options involves splitting up into smaller companies.

PC maker Hewlett-Packard is mulling over breaking up the company in a bid to return the maximum value to company shareholders, according to a report.

Citing unnamed sources, blog Quartz said company directors have "discussed the details of a possible breakup scenario," among other options.

However, one source close to the company, speaking to ZDNet, said HP wanted to "stay as one HP," seemingly dismissing the Quartz report.

The news outlet's sources say that there is no "overt pressure" to break up the company, and no definitive decisions have been made on the matter.

But at a time when the company's share price has fallen by 75 percent in just over two years, and the firm continues its restructuring effort -- in which close to 30,000 jobs will be lost by the end of 2014 -- shareholders and investors are at the edge of their seats wondering when they'll see a financial return.

Investors are, according to the report, wanting more from their financial contributions and believe the PC making behemoth is worth "much more" than its recent share price. It could be that HP might be a better profit generator and money maker as separate companies rather than one giant company.

In its recent 10-K filing with the U.S. Securities and Exchange Commission, HP said:

We also continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives. When we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives. We may also dispose of a business at a price or on terms that are less desirable than we had anticipated.

This was, many thought, a signal that the PC maker would sell off certain units -- particularly troublesome divisions that have cost the company money or that aren't generating profit.

It's somewhat reminiscent of former Chief Executive Leo Apotheker's move to spin off HP's PC making division. The move was rejected by investors and Apotheker was forced out. Current CEO Meg Whitman reversed the decision and brought the PC making unit back to the top of PC manufacturing tables.

Sources speaking to Quartz said those vetoed decisions are now floating back into the minds of investors.

Despite the troubles the company faces, The Wall Street Journal has cited its own sources in saying that Whitman has no plans to sell the company's Autonomy and EDS business units, despite numerous offers from outside firms.

HP, which remains at the top of the PC manufacturing leader board, according to recent IDC figures, recently said in its fourth-quarter filing with the U.S. Securities and Exchange Commission (SEC) that Autonomy had engaged in "serious accounting improprieties" before it was bought by HP in 2011, and the computing giant ultimately had to swallow an $8.8 billion charge as a result.

When about the Quartz article, an HP representative said the company does not comment on speculation.

This story originally appeared on ZDNet under the headline "HP reportedly considering company 'break up'."

 

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