Hewlett-Packard, one of the world’s largest IT and technology companies, added a clause into its filing with the U.S. securities and exchange commission (SEC) saying that the company may spin-off or sell business divisions that do not meet financial targets. The company implies that by far not all of its business units can be sold at a desired price and the transaction itself may affect HP negatively.
“We also continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives. When we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives,” a statement by HP’s in its form 10K reads.
Bloomberg news-agency noted that previously the clause was not included in the HP form 10K, which points to the fact that Hewlett-Packard foresees certain risks ahead.
“We may also dispose of a business at a price or on terms that are less desirable than we had anticipated. In addition, we may experience greater dis-synergies than expected, and the impact of the divestiture on our revenue growth may be larger than projected. After reaching an agreement with a buyer or seller for the acquisition or disposition of a business, we are subject to satisfaction of pre-closing conditions as well as to necessary regulatory and governmental approvals on acceptable terms, which may prevent us from completing the transaction,” said HP.
When Meg Whitman, the current chief executive officer of HP, took reigns in late 2011, she cancelled the spin-off process of Hewlett-Packard’s personal computer business unit, saying that the synergies between PC business and other businesses are too great to dispose the former. However, it looks like now the company may consider disposing units again, after the great scandal with Autonomy.
“Dispositions may also involve continued financial involvement in the divested business, such as through continuing equity ownership, guarantees, indemnities or other financial obligations. Under these arrangements, performance by the divested businesses or other conditions outside of our control could affect our future financial results,” the statement by HP reads.