Hewlett-Packard Co. has hired
Goldman Sachs Group Inc. to help the company defend itself against
possible activist investors who could push for change at H-P, people
familiar with the matter said.
Concerns about H-P intensified when Leo Apotheker was ousted as
chief executive and replaced by Meg Whitman. Shown in a
combination photograph, Ms. Whitman last year and Mr. Apotheker in
H-P has felt vulnerable to possible
activist investor pressure amid questions about the company's
performance and strategic direction, the people said. The concerns
intensified earlier this month when Leo Apotheker was ousted as chief
executive and replaced by Meg Whitman.
As a result, Goldman was recently
brought on board to help H-P formulate defenses in case it becomes the
target of shareholders seeking change, the people added. Typically,
companies with such a concern put in "poison pills" – shareholder
rights' plans that make takeovers more difficult for activist
An H-P spokeswoman said the company
"has long-term relationships with a large number of investment banks."
A Goldman spokesman declined to comment.
Goldman is known for its
expertise in helping companies strategize how best to fend off
unwanted offers. The bank helped advise
NYSE Euronext on its defense against a bid led by
Nasdaq OMX Group earlier this year.
Activist investors often start
accumulating shares of a company they see as undervalued, amassing a
large-enough position to agitate the company's board for changes,
ranging from new leadership to a break-up.
Analysts have said H-P's seeming lack
of direction, the management-related instability, as well as the
potential for restructuring its portfolio of hardware and software
assets, make the company an attractive target for investor activism.
Some investors and critics
have questioned the abrupt hiring of Ms. Whitman. The former head of
eBay Inc., Ms. Whitman joined H-P's board in January, but doesn't
have any experience running a computer hardware, software and services
company, especially one the size of H-P, which has a market
capitalization of more than $46 billion.
H-P was also lambasted for major
changes approved by the board on which Ms. Whitman served and made by
Mr. Apotheker before he was let go after 11 months on the job.
H-P's stock fell by 20% in
August after the company announced it planned to explore spinning off
its personal computer business, nix its TouchPad tablet and
smartphones, and buy U.K. software maker
Ms. Whitman supported Mr. Apotheker's
decision to explore a spinoff of the PC business. Since she became
chief executive, she said she is studying the decision and would come
to a conclusion on the unit's fate by the end of the year.
Although private equity firms in recent
months have reached out to H-P about whether it was interested in
selling the PC business, a sale is seen as unlikely, people familiar
with the matter said. H-P will either decide to spin it off if it
creates value, or keep it in the company, they said.
contributed to this article.
Gina Chon at
firstname.lastname@example.org and Anupreeta Das at