HP moves to allay shareholders with $10 billion repurchase plan

HP moves to allay shareholders with $10 billion repurchase plan

Summary: With a $2 billion offer on the table to acquire 3Par, Hewlett-Packard moved to allay shareholder concerns with a hefty stock buyback plan.

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With a $2 billion offer on the table to acquire 3Par, Hewlett-Packard on Monday moved to allay shareholder concerns with a hefty stock buyback plan.

HP's repurchase program comes a few days after it raised its offer for 3Par to $30 a share, shortly after Dell matched a previous offer. Dell hasn't yet responded, but has three business days to do so. 3Par late Friday declared HP's bid superior and indicated that it would terminate its merger agreement with Dell without a matching bid.

To beat Dell and prevent it from getting storage traction in data centers, HP appears willing and able to pay 10x revenue for 3Par. Given the bidding war and the departure of CEO Mark Hurd, HP had to allay concerns. Enter the $10 billion buyback.

HP CFO and interim CEO Cathie Lesjak said that the company will "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."

The message for both shareholders and potentially Dell is that HP has a strong balance sheet. Indeed, HP had cash from operations of $3.3 billion for its July quarter with free cash flow of $2.1 billion.

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Topics: Hewlett-Packard, Banking, Dell

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4 comments
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  • Solid Move by Dell and Interim CEO, no doubt!

    I don't Dell is willing to spend any more on 3Par and no doubt this is a confidence boosting maneuver by a company not willing to be complacent in a move to reinforce their #1 status in the World of Computing and now in Data Centers!
    i2fun@...
  • Questionable Customer Service... Could that be the problem?

    HP's "Operating System Not Found" takes 16th place for questionable customer service.

    http://www.atom.com/tournament/
    szymonkarl
  • RE: HP moves to allay shareholders with $10 billion repurchase plan

    HP's "Operating System Not Found" takes 16th place for questionable customer service.

    http://www.atom.com/tournament/
    szymonkarl
  • RE: HP moves to allay shareholders with $10 billion repurchase plan

    home depot tried this in 2003-2004 the stock was falling from high of $59 despite $ billions spent the stock fell below $30 it is still at that level, it was like flushing billions of dollars down the toilet, if that is the only way a CEO can think of to invest money to help his company he should resign..it shows he has no vision or plan. It is sales ,service , products and marketing that lead to profits and a subsequent increase in share price anything else is just like a quick snort to give a buzz
    7trumpets