HP to resume share buyback after merger talks with EMC fall flat
Reuters
Published Oct 15, 2014 09:10AM ET
HP to resume share buyback after merger talks with EMC fall flat
(Reuters) - Hewlett-Packard Co (N:HPQ) said it would resume its share repurchase program, a day after sources told Reuters that the company had ended merger talks with EMC Corp (N:EMC).
Shares of the company were up as much as 3 percent at $33.24 in premarket trading, while EMC's shares were marginally down at $27.28.
HP, which has not acknowledged it was in talks with EMC, said it was resuming the buybacks as it was no longer in possession of "material information" that had led it to suspend share buybacks in August.
Executives from the two companies were still trying to hammer out a deal as recently as last week, but talks bogged down on price and are now dead, people briefed on the matter told Reuters.
HP said on Wednesday it remains committed to returning at least half of its free cash flow to shareholders through dividends and share buybacks in fiscal 2014 and 2015 and intends to make up for the shortfall over the rest of the year and 2015.
HP said on Oct. 6 it would split into two listed companies, separating its computer and printer businesses from its faster-growing corporate hardware and services operations as part of its turnaround plan.
HP is now engaged in a breakup of its own, which analysts say should discourage merger thoughts.
(Reporting By Lehar Maan in Bangalore; Editing by Savio D'Souza and Don Sebastian)
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