Hewlett-Packard Co. revealed in an official statement today that it will resume its share buyback program. This decision of the company eliminated speculations that HP is still considering the takeover of EMC Corp.
According to the statement by Hewlett-Packard, its share repurchase program had been stopped due to the possession of “material non-public information”. The U.S.-based tech company did not provide any more information, but explained that it no longer has that information.
The buyback program was stopped a week ago, when HP revealed its intentions to separate the company into two independent entities. Its negotiations to acquire EMC were put to an end in September 2014, while people with knowledge of the matter reported that this was due to disagreements over the price of the purchase and the management structure.
The deal between Hewlett-Packard and EMC would create a company with a combined market value estimated to nearly $130 billion. A person familiar with the negotiations revealed that the takeover would have been an all-cash deal billed as a merger of equals.
Dave Farmer, a spokesman from HP, refused to make any comments on the situation. Today Hewlett-Packard revealed that it is still committed to returning at least half of its free cash flow to its investors through dividends and share buybacks over the fiscal 2014 and 2015.
Mr. Daniel Ives, an analyst at FBR capital Markets 7 Co., said in a note, cited by Bloomberg: “Talks around the HP/EMC combination appear to be over.” He also added that the companys reference to no longer having the non-public information “we believe refers to EMC merger talks that have now officially concluded”.
Hewlett-Packard Co. was up 1.46% to trade at $32.71 per share today on the NYSE, marking a one-year increase of 43.53%. The company is valued at $60.17 billion. According to CNN Money, the 25 analysts offering 12-month price forecasts for Hewlett-Packard Co. have a median target of $40.00, with a high estimate of $55.00 and a low estimate of $34.00. The median estimate represents a +22.25% increase from the last price of $32.72.
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