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HP gets OK to buy back $10 billion of stock

In midst of bidding war with Dell to acquire storage vendor 3Par, HP receives authorization from its board to repurchase up to $10 billion of its own shares as it sees opportunities.

Hewlett-Packard has been given the go-ahead by its board to buy back up to $10 billion of its own stock, the company announced Monday.

HP said it plans to pick up shares "opportunistically" and is targeting the repurchase as a way to manage the dilution created by stock issued to its employees.

"HP has a strong balance sheet," Cathie Lesjak, HP chief financial officer and interim CEO, said in a statement. "We plan to be active in repurchasing our shares, and we expect to repurchase at least $3 billion worth of our shares in our fiscal fourth quarter at current price levels. This increased authorization will ensure that we have sufficient capacity to continue to be active in repurchasing our shares prior to our fiscal fourth-quarter earnings announcement in November."

HP has already been scooping up its own stock as part of an $8 billion buyback plan approved last November. The company bought up about $2.6 billion of shares during its fiscal third quarter and now has another $4.9 billion or so left to spend under that plan. HP currently has about 2.3 billion shares of common stock outstanding.

Following the announcement, HP's stock price climbed 3.5 percent, to $39.31.

The company has also been fighting a bidding war with Dell over storage vendor 3Par. The back-and-forth volley saw the two trying to top each other last week with increasingly higher bids. Although 3Par had apparently agreed to Dell's proposal of $27 a share, HP swooped in on Friday, dangling a $30-per-share offer, and it released a statement of preference on Friday for the HP bid, giving Dell until Wednesday to top it.