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The decision to replace Leo Apotheker as CEO may have been driven by fears that falling stock was making HP vulnerable. |
Hewlett-Packard Co. directors were concerned that plummeting shares would make the company vulnerable to a bid from Oracle Corp. when they replaced Leo Apotheker with Meg Whitman, two people close to the board said.
While Oracle has considered informally whether to approach Hewlett-Packard, it is unlikely to make a bid soon, three people close to the software company said. After speaking with financial advisers, Hewlett-Packard hired Goldman Sachs Group to help it prepare for any moves by investors, one person said.
Whitman took over as chief executive on Sept. 22, succeeding Apotheker, who presided over a 47 percent drop in Hewlett-Packard stock and sliced sales forecasts three times in less than a year. As the board deliberated changing chief executives, one consideration was whether share-price weakness would invite an unwelcome overture, the people close to the board said.
“We were very explicit about why we named a new CEO,’’ said Mylene Mangalindan, a spokeswoman for Hewlett-Packard, based in Palo Alto, Calif. “The board believes that the job of the HP CEO now requires additional attributes to successfully execute on the company’s strategy.’’
Michael Duvally, a spokesman for Goldman Sachs and Deborah Hellinger, a spokeswoman for Oracle declined to comment.
Share declines accelerated after the Aug. 18 announcement that Hewlett-Packard would consider spinning off its $41 billion personal computer division, and would buy Autonomy Corp. of Cambridge, England, for $10.3 billion, a price investors regarded as too high. Apotheker also was unable to get top executives to work together, executive chairman Ray Lane told investors on a Sept. 22 conference call.
Oracle is not interested in Hewlett-Packard’s PC, printer, or information technology-services divisions, nor does it want to sell server computers running Windows, the software made by Oracle rival Microsoft Corp., one person said. The company may also be inhibited by terms of an agreement, announced in September, over the appointment of Mark Hurd as a copresident of Oracle, other people said. That’s when the companies resolved the lawsuit by Hewlett-Packard, which sued on Sept. 7 to block Hurd - former CEO of Hewlett-Packard - from moving to Oracle.
The agreement included stipulations that Hurd protect Hewlett-Packard’s confidential information while fulfilling his obligations to Oracle, the companies said at the time. It also bars Oracle from attempting to acquire Hewlett-Packard until some time early next year, people familiar with the agreement said.
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