HP Backs Off Oracle Confrontation As Its Value Slides
Hewlett-Packard has backed down in its suit against Mark Hurd, former CEO of HP and now co-president at Oracle:
HP and Oracle Corp. today reaffirmed their long-term strategic partnership and the resolution of litigation regarding Mark V. Hurd's employment at Oracle. While the terms of the settlement are confidential, Mr. Hurd will adhere to his obligations to protect HP's confidential information while fulfilling his responsibilities at Oracle.
HP had filed a civil suit against Mr. Hurd that claimed, "Hurd will be in a situation in which he cannot perform his duties for Oracle without necessarily using and disclosing HP's trade secrets and confidential information to others."
HP has lost considerable value since the departure of Mr. Hurd, losing $6 billion or more than 6% in market cap to $89.3 billion. Oracle has jumped by $22 billion, or 19% to $138 billion over the same period.
It clearly cannot afford a long and protracted disagreement with a key business partner which might further damage its value.
The announcement comes at the beginning of the Oracle OpenWorld conference, which attracts tens of thousands of IT buyers to San Francisco.
The settlement certainly appears to be a defeat for HP. In a story about deal making in the current issue of The Deal, JMP Securities LLC analyst Pat Walravens says:
That can't be good for HP. There is no way that Mr. Hurd can not use his competitive knowledge.
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Please see: Updated: Could Hurd + Oracle Acquire HP? - SVW