When Hewlett-Packard Corp. (NYSE: HPQ) paid billions for computer services giant EDS in 2008, the reasoning was clear: HP wants to be in the "IBM" business. You know, the one that serves up and retains lucrative computer services contracts that mean much more to any bottom line than razor-thin hardware margins. It appears HP wants to do both.eds acquisition posts
FeedHewlett-Packard's recent EDS acquisition strategy becomes more visible
When Hewlett-Packard Corp. (NYSE: HPQ) paid billions for computer services giant EDS in 2008, the reasoning was clear: HP wants to be in the "IBM" business. You know, the one that serves up and retains lucrative computer services contracts that mean much more to any bottom line than razor-thin hardware margins. It appears HP wants to do both.Continue reading Hewlett-Packard's recent EDS acquisition strategy becomes more visible
EDS shareholders want to postpone acquisition by Hewlett-Packard
Shareholders of EDS Corp. (NYSE: EDS) are starting to fidget in their collective seats now that the a shareholder meeting between the company and suitor Hewlett-Packard Corp. (NYSE: HPQ) is scheduled for July 31st. The delay is being brought on by a contingent of shareholders that believes the price H-P will be paying for EDS is, of course, too low.The shareholders claim that the $25 per share price is too low in addition to a provision that doesn't allow the EDS board to accept higher offers, should one be brought forth. Dallas-area law firm Baron & Budd said "With increased revenues over the past 12 months and 2008 projections on track, the shareholders are questioning why EDS is accepting what many experts consider to be an undervalued share price." Since EDS is headquartered in Plano, Texas -- just outside Dallas -- perhaps some heavy-handed Texas shareholders don't want to sell out to a west coast firm? Who knows.
EDS continues to believe the acquisition by H-P is still in the best interests of the company. A combined HP-EDS would have more than 200,000 employees with operations in more than 80 countries. The combination would form a large challenge to business services and consulting company IBM Corp. (NYSE: IBM) as H-P tries to conquer yet another giant after taking the PC sales leadership crown from Dell, Inc. (NASDAQ: DELL) in 2007.
Hewlett-Packard (HPQ): Tech expert sees sees 'clear value'
In Next Inning newsletter, technology stock guru Paul McWilliams sees weakness in Hewlett Packard (NYSE: HPQ) as an opportunity to buy "one of the best-managed large cap tech companies in the world."
"Following Mark Hurd's appointment as CEO back in 2005, we turned cautiously bullish on the shares. It didn't take long to realize that he was not only making the right decisions, but also executing them swiftly and effectively.
"Hurd hit the ground running, trimming fat and restructuring both internal and sales channel operations. The net results were rapidly growing sales, improved profitability and a much higher stock price.
"Now, in line with our earnings preview, Hewlett Packard announced results that were better than the consensus expectation of the covering analysts; HPQ also raised its full year guidance.
"However, the real news is the company's intention to purchase EDS for $13.9 billion. The news of the acquisition has knocked the stock down to a level that represents a clear value opportunity.
"In my view, this is a brilliant move by HPQ and that the negotiated price represents a solid value for HPQ. I believe this represents an opportunity for investors to buy one of the best-managed large cap tech companies in the world at a clear value price."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
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