The Register®

Original URL: http://www.theregister.co.uk/2011/11/18/hp_activist_investor/

HP welcomes activist investor onto board

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

By Paul Kunert

Posted in Financial News, 18th November 2011 15:36 GMT

Steps to Take Before Choosing a Business Continuity Partner

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 [1], the demise [2] of WebOS-based hardware and the expensive buy [3] of Autonomy.

The blundering [4] CEO's antics led to a 20 per cent slump in HP's market cap and a subsequent lawsuit [5] from a US investor. To fend off the unwanted advances of any potential activist investors, HP then hired [6] 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. ®