HP welcomes activist investor onto board
Better to have him inside the tent, pissing, um, everywhere
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.
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. ®