Hewlett-Packard board approves split into two firms

The spilt is expected to complete on Nov 1

Hewlett-Packard Co said its board had approved the previously announced split of the company into two separate listed entities - computers and printers, and corporate hardware and services.

Hewlett-Packard said on Thursday that it expected its split into Hewlett Packard Enterprise Co and HP Inc to be completed on November 1. A day later, Hewlett Packard Enterprise, comprising the corporate hardware and service business, will start trading on the New York Stock Exchange under the ticker symbol “HPE”.

Hewlett-Packard, which will be renamed HP and comprise the computers and printers business, will continue to trade under its current ticker symbol.
 

Hewlett-Packard shareholders will get one share of Hewlett Packard Enterprise for each share held as of October 21. The tax-free distribution will be on a pro-rata basis, the 75-year-old company said.

Hewlett-Packard announced the split in October 2014 after years of struggling to adjust to the post-PC computing era.

Hewlett-Packard said it expected Hewlett Packard Enterprise to start trading on a “when issued” basis on or around October 19 under the ticker symbol “HPE WI”.

Hewlett-Packard shares were unchanged at $25.61 in premarket trading on Thursday. Up to Wednesday’s close, the stock had fallen about 27 per cent since October 3, the last trading day before the company announced the split.

Autonomy founder sues HP

British tech entrepreneur Mike Lynch on Thursday said he would file a claim against Hewlett-Packard for $150 million in damages over allegations the US company made about his role in the acquisition of his software company Autonomy in 2011. Lynch’s action marks the latest twist in a long-running battle between the HP and Lynch that has led to multiple lawsuits over who is to blame for a disastrous deal that cost HP shareholders billions of dollars of value.

HP’s $11-billion purchase of Autonomy was supposed to form the central part of the US group’s move into software. But the deal turned sour a year later when HP wrote off three-quarters of the British company’s value, accusing Lynch and his colleagues of financial mismanagement. In March, HP lodged a claim in London against Lynch and his former colleague Sushovan Hussain for damages of about $5.1 billion over their management of Autonomy.

HP alleged Lynch and Hussain had conducted a systematic and sustained scheme to make Autonomy look like a rapidly growing, pure software company, when in reality it was the opposite.

Lynch has prepared a response to that case, and on Friday said documents showed HP was made aware of practices at Autonomy, for example in a due diligence report prepared by KPMG.

Lynch, commenting on the law suit launched on Thursday, said HP had made many statements that were highly damaging to him and misleading to the stock market, and the company knew, or should have known, these statements were false.

"HP's own documents, which the court will see, make clear that HP was simply incompetent in its operation of Autonomy, and the acquisition was doomed from the very beginning," he said.

Lynch said he hoped the claim would result in HP chief executive Meg Whitman appearing in court.

"This is about dragging them to be accountable, to actually explain the chaos, the mismanagement and the internal warfare, and then the attempt to cover it up," he told Reuters.

HP said Lynch's lawsuit was a "laughable and desperate attempt to divert attention from the $5 billion lawsuit HP has filed and the ongoing criminal investigation".

"HP anxiously looks forward to the day Lynch and Hussain will be forced to answer for their actions in court," a spokeswoman said.