Report: Oracle Considering Hostile Takeover of HP

OracleClaiming a variety of unnamed and unspecified sources, The New York Post reported that enterprise software giant Oracle is considering a hostile takeover of mid-life crisis computing firm HP.

The story is predicated on the idea that with the recent stock sell-off that accompanied HP’s announcement that it would spin off or sell its PC division (the Personal Systems Group, or PSG), HP is ripe for a takeover, especially when you toss in the Palo Alto company’s plans to spend US$10 billion on enterprise software company Autonomy.

HP (HPQ) was trading at $32.67 per share on Tuesday, August 16th, and closed at $24.45 on Monday, a 25.2% decline.

Add to that the reality that if HP is successful in dumping its PC business, the company becomes even more compelling for Oracle, which has no interest in that business. Oracle already makes hardware for the enterprise space under its Sun brand, which it acquired in 2009.

Another element is that former HP CEO Mark Hurd is one of Oracle’s executives, meaning that Oracle CEO Larry Ellison has an inside man on his team who understands the company better than most other people on the planet.

The source of this latest rumor is an unnamed source “close to the matter” who said that, “If that stock keeps dropping, I think [a takeover] is inevitable.” That source also believes that Oracle would then spin off HP’s very profitable printer business.

The source added, “Perhaps in three years [the Autonomy acquisition] will turn out to be a smart acquisition. But the reality is in nine months HP will likely be defending itself in an Oracle fight.”

The Post also cited an unnamed banker who also believes that Oracle will make a hostile takeover bid for HP, but that it will happen further out than the other unnamed source’s timetable.

Finally, an unnamed “antitrust source” said that such an acquisition would likely pass regulatory hurdles, though some concessions might be required. There is no indication of whether this is a source inside the U.S. Department of Justice or some outside party.

The Post, a News Corp. holding, did not specify whether or not it used any information gained from hacked voicemail accounts.