Reuters reported that its deep throats in HP said hopes to merge two of the tech industry’s largest enterprise-oriented firms had been dashed.
Pressure is building on EMC to do some spinning off in an attempt to unlock shareholder value, become more agile, and capitalise on faster-growing businesses.
Executives from the two companies were still trying to hammer out a deal as recently as last week, but talks bogged down on price. We guess EMC really could not believe that printer ink had the same value as gold.
HP suspended its stock buyback program ahead of its November 25 earnings because the company said it is in possession of material non-public information. Chief Financial Officer Cathie Lesjak noted on a conference call that the non-public information pertains to a possible acquisition.
It is not clear what the two were thinking of merging. A straight-up merger of the two companies would have created one of the industry’s largest providers of data storage, and created a computing giant with deep penetration in the business of providing computing hardware and services to corporations. However last week HP announced its plan to split off into HP Enterprises, a tech infrastructure, software and services business, and HP which will play in the PC and printer markets.
Elliot Management, which owns 2.2 percent of EMC, has been vocal about wanting EMC to merge or spin off some of its assets, such as software subsidiary VMWare. EMC has said that it wants its company to stay together.