How would this be for a turnaround: two years after Hewlett-Packard Co. caused consternation for investors, analysts, partners and customers by publicly musing about selling off its PC business (and then doing an about-face and dumping its CEO), what if it decided to buy Dell?
Sure, HP may be a little crazy, but are they that crazy? Probably not. It would be something, though. And it’s not entirely outside the realm of possibility.
With Dell having inked a deal with founder Michael Dell and an investment firm to take the company private for US$24 billion, the Dell board has expressed an openness (as its responsibility to maximize shareholder value requires) to consider competing offers. Enter HP.
According to a report from Bloomberg, Dell rivals and Lenovo are circling, using the “go-shop period” to get access to Dell’s books that wouldn’t otherwise be available to them. It’s a good opportunity to peer inside the operations of a fierce rival, particularly one that is likely soon to be going private – meaning the end of all those mandatory regulatory filings that reveal lots of interesting nuggets to shareholders – and competing vendors.
I agree with Larry Walsh over at Channelnomics, who argues HP and Lenovo are only “feigning interest” in Dell to get a look at the goodies, and assess just how much of a competitor might be as it tries to transform itself from a PC vendor to a platform vendor – more like an HP than a Lenovo, frankly.
HP making a play for Dell would be delicious irony, and would have to drive former CEO Léo Apotheker a little crazy. Would it make business sense, though?
Probably not for HP. Buying up more share in the PC maket probably isn’t the best use of their limited resources, although Dell’s networking holdings could be an interesting complement. There is, though, an argument to be made for consolidation in the PC market, driving efficiency in manufacturing and market share to squeeze a little more out of the tight margins. In that regard, Lenovo may be a more logical suitor. Or, as I argued earlier this year, Samsung.
Wouldn’t be as fun as HP doing the deal, though.