- This topic has 0 replies, 1 voice, and was last updated 9 years, 9 months ago by
.
-
Posts
-
HOW ORACLE PLANS TO ACQUIRE HP
Oracle rumored to look at acquiring HP
REDWOOD CITY — A Silicon Valley high tech trailblazer is reportedly in the sights of a tech rival. Bloomberg has reported that Oracle is interested in snapping up longtime rival Hewlett Packard, but not just yet.The news service quotes an unnamed source familiar with Oracle’s strategy as saying that Larry Ellison’s firm isn’t interested in taking on HP’s printer or PC business. The source says that Oracle intends to wait until the two units are either spun off or sold before making their moveHP’s recent stock plunge has made the Palo Alto based firm an increasingly tempting target.
HP could shed printing group after bidding PC adieu
Hewlett-Packard could evaluate spinning out its USD 25bn printing group within 18 months of divesting its PC business, three industry sources told mergermarket.On 18 August, the Palo Alto-based company announced it was exploring strategic alternatives for its Personal Systems Group (PSG), including separating its PC business into an independent company through a spinoff or other transaction. Todd Bradley, head of the PSG unit, said the evaluation should conclude in 8 to 12 weeks, according to published reports.
The divestiture of HP’s Imaging and Printing Group appears to be a necessary step on the path to becoming a low volume, high value-add product provider, said the first industry source, who is familiar with HP, and the second industry source, who is a sector banker. HP is likely to hold on to the printing group through the transition into an enterprise solutions company and could look at a spinoff of the printing group within two years of shedding the PC business, the same sources estimated. They were not aware of an active sale process for the group.
HP declined comment for this story.
The USD 40bn PC business could be more valuable if combined with a sale of the printer business, the sector banker said. He cautioned, however, that HP may be avoiding spinning out both divisions at the same time because the move would represent too big a shift in strategy.
The most “realistic” outcome of HP’s strategic review is that the company’s PC unit become a standalone entity, said the first industry source. HP CEO, Leo Apotheker, has been highlighting the benefits of a standalone PC business to shareholders, notably telling the Financial Times last week the company’s PC unit would be able to react faster to consumer trends as an independent entity.
HP is hoping its PC unit will be valued as a standalone company in the USD 10bn range, Bradley said in interviews with the press last week. The PC business could see interest from Asian manufacturers, such as LG, HTC and Huawei Technologies, said both industry sources and the third industry source, who is a sector executive. Samsung Electronics, according to a recent press report, is uninterested in acquiring the unit.
Despite potential takeout interest, the first industry source cautioned that the size of the deal coupled with potential operational risks makes the likelihood of a sale slim. HP’s PC business has low margins and must compete with Apple and a strong Microsoft-Intel partnership, the source explained.
Toying with homes for webOS platform
HP’s mobile platform, webOS, may be bundled with the PC business in the event of a sale or spin-off, the first industry source said. Stephen DeWitt, head of the webOS unit, already reports to Bradley, who is in charge of HP’s PC division. The platform was part of Palm, acquired by HP in April 2010.HP announced on 18 August it would cease manufacturing operations for webOS devices. The first industry source claimed HP failed to present a cohesive plan for the platform, which would face stiff competition from Apple, Google and Microsoft’s mobile platforms.
In shutting down Palm’s hardware operations, the company will “kill” the asset value, said the source, noting that HP is only left with Palm’s webOS intellectual property. The business would not be worth the USD 1.2bn HP paid for the company, he claimed. The entire webOS IP could be sold to an Asian manufacturer for around USD 100m, the sector executive speculated. Senior HP executives have also said that the company is in licensing talks with third parties for the webOS software.
In the event HP decided to sell the webOS platform separately from the PC unit, Samsung, LG and HTC would be the most likely acquirers, said the banker and the executive. While the first industry source said Cisco Systems could also show interest, he cautioned that the San Jose, California-based company is facing its own strategic issues. Nokia and Microsoft are now partnered up so both are unlikely to be interested in Palm’s operating system, the same source added.
HP could also consider making the webOS platform open source to accelerate growth and reduce costs, said one of the industry sources. The company, however, would probably struggle to make money with this business model, said the same source.
Unlike his predecessor Mark Hurd, Apotheker works closely with consulting company McKinsey & Co, which likely played a role in the decision to spin off the PC unit and shutter the webOS manufacturing operations, the first industry source said.
- You must be logged in to reply to this topic.