HP Breakup Bolstered as Takeovers Exceed Equity Value: Real M&A

Hewlett-Packard Co.’s value has plunged to less than the $31 billion it spent during a five-year takeover binge, the strongest evidence yet that investors would be better served by disassembling the maker of consumer laptops, printers and corporate servers.

Deals for Autonomy Corp., Electronic Data Systems Corp., Palm Inc. and others built on the $17.6 billion purchase of Compaq Computer Corp. a decade ago, when Hewlett-Packard doubled down on personal computers. With the company failing to capitalize on a boom in demand for smartphones, tablets and cloud computing, fiscal 2012 sales fell, and analysts project declines for at least three more years, according to data compiled by Bloomberg. In the latest setback, Hewlett-Packard said it overpaid for Autonomy because of fraud, boosting last year’s deal-related writedowns to $18 billion.