HP may separate its units after recent troubles

HP directors in talks to break up company

The HP board is currently discussing the details of a possible breakup scenario, reports Mashable.

People ‘familiar with the matter’ told the tech site that ‘the Hewlett-Packard board is studying a break-up of the US tech company among several options the directors are considering to obtain maximum value for shareholders’.

The HP source stated that there is no overt pressure to break up the firm, and so far no final decision has been made. “If it seems that HP will be able to recover from its recent troubles, then a separation of its units may not be in the cards,” they said.

The breakup could see HP’s divisions worth more as separate units rather than bundled together as they are now. Analysts have estimated that if HP’s units were separated, the total value of divisions could be worth over $20 a share, compared to the firm’s current $16.50 share price.

Kraft, McGraw-Hill and Tyco are examples of other companies that have decided to break up and lose divisions that were dragging the company down.

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