Hewlett Packard Enterprise is being eyed up by private equity firms, with the tech giant targeted in a potential blockbuster $US40 billion acquisition.
That’s according to investigative technology website, The Information, which claims that a host of private equity firms, including KKR, Apollo Global Management and Carlyle Group, are weighing up the potential of a move, removing the vendor from the glare of the public eye.
As explained by author Kevin McLaughlin, “a buyout would allow HPE, currently the world’s largest seller of servers and storage systems, to streamline outside the glare of public scrutiny.”
Following McLaughlin’s claims, shares in the company spiked seven percent on the stock exchange, yet closed around 3.5 percent as more details of the potential deal emerged.
According to Reuters, the firms are focused on acquiring certain software assets from the vendor, worth somewhere between $US6 billion and $US8 billion, rather than the entire company.
Such a strategy would fit the bill for Hewlett Packard Enterprise, following a year of shrinking in the apparent quest of success.
As reported by ARN, first came the much-publicised split, giving birth to both Hewlett Packard Enterprise and HP Inc, and most recently came its Enterprise Services spin off with solutions and services provider CSC, in a $8.5 billion deal.
While the ‘less is more’ philosophy served Steve Jobs well during his Apple tenure, CEO Meg Whitman’s approach to growth is raising eyebrows among analysts and investors.
Mocked during EMC World 2016 in Las Vegas in May, Michael Dell stood boastfully in front of 3,000 partners, ARN included, to question the strategy of his long-time industry rival.
“The IT services industry has been splitting and merging, bringing together companies with similar business models,” Technology Business Research Vice President, Lindy Hanson, observed.
“Quarterly performance pressures to streamline operations and strategic focus and adherence to the “do what you’re good at best” principle of running a successful company drive the changes.”
But while speculation remains rife as to the future of direction of Hewlett Packard Enterprise, analysts remain united in the belief that by becoming smaller and nimbler, Whitman is making a buyout more likely by the day.
Sign up for CIO Asia eNewsletters.