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HP welcomes activist investor onto board

Better to have him inside the tent, pissing, um, everywhere

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HP has found a seat on the board for activist stakeholder Ralph Whitworth, co-founder at Relational Investors which should buy his silence - in public at least - for a couple of years while CEO Meg Whitman steadies the ship.

Relational bought 17.3 million HP shares or 0.9 per cent of the total stock in August following Apotheker's PSG gaffe, the demise of WebOS-based hardware and the expensive buy of Autonomy.

The blundering CEO's antics led to a 20 per cent slump in HP's market cap and a subsequent lawsuit from a US investor. To fend off the unwanted advances of any potential activist investors, HP then hired investment bank Goldman Sachs.

According to a regulatory filing, Relational, which will sit be on HP's board for the next two years has agreed not to drum up support from other investors to push for a sale or merger and will not buy more than 9.9 per cent of stock.

“We believe that Ralph will bring a constructive voice and a track record of value creation into the boardroom,” said Ray Lane, HP’s executive chairman of the board. “We look forward to benefitting from his perspective and experience.”

Whitworth - who takes the newly created fourteenth seat on the board - said HP has "an extraordinarily valuable global franchise".

He must maintain at least a 0.5 per cent stake in HP or will be forced to resign from the board. ®

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