Will Oracle Buy HP?
Oracle Corp. is reportedly likely to wait until after Hewlett-Packard Co. spins off its personal computer division to make a move to buy its rival.
Bloomberg quotes an unnamed source it said is familiar with Oracle's strategy who said the Redwood City software company (NASDAQ:ORCL) isn't interested in taking on HP's PC or printer businesses.
That move could be 12 to 18 months away, the timetable projected on when HP could make its move on the PC business.
But the Palo Alto company's (NASDAQ:HPQ) recent stock drop makes it the cheapest publicly traded tech company and an attractive breakup target, Bloomberg reported.
The New York Post over the weekend also quoted unnamed sources who said HP's low stock price could trigger a takeover bid by Oracle.
Bloomberg said that HP's 20 percent stock drop on Friday put its valuation at five times its estimated profit, about 70 percent below the next cheapest tech company. That is below even struggling Blackberry maker Research in Motion Ltd. (NASDAQ:RIMM), which is valued at about 5.2 times its expected earnings.
HP stock rose 3.6 percent on Monday to close at $24.45, giving it a market cap of about $50.7 billion.
Oracle stock rose about 1.4 percent to close at $25.40, putting its valuation at about $127 billion.
HP's stock plunge was triggered by the company's disclosure last week that it would like to spin off or sell its PC division, that it is killing the TouchPad tablet line and that it has agreed to pay more than $10 billion for British business software company Autonomy.
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