UBS advises HP to break itself up to increase its share price

FLOGGER OF EXPENSIVE PRINTER INK HP has been urged by investment bank UBS to break itself up in order to boost its share price.

After years of mismanagement, HP's stock price is far lower than it was during the heady dotcom bubble days when it pulled off one of the biggest mergers in recent years by buying Compaq. Now the firm's stock price languishes around the $14 mark, a figure that could top $20 if HP were to break itself up, according to UBS.

UBS analysts including Steven Milunovich reported the firm could "realise greater value" by splitting itself up. The analysts added that each separate division of HP is big enough to stand on its own, claiming, "HP's units are not minnows but rather they are whales packed into the same pond."

HP spokesman Michael Thacker claimed the firm's customers want a big HP, effectively allowing them to have one supplier for all their IT needs, a message the firm has been playing up for a number of years now. Thacker said, "No matter how you look at it we are confident that HP is stronger together than apart. The company's operations across business units are deeply integrated and our customers have told us that they want One HP."

Last week HP CEO Meg Whitman effectively wrote off 2013 by saying not to expect a turnaround in the firm's fortunes until 2014. Her public statements sent investors rushing for the exits and the firm's stock price fell by almost 10 percent in a single day. UBS' analysts might take the Leo Apotheker view of HP, but it seems highly unlikely that Whitman will make the same mistakes that saw Apotheker get sacked within 10 months of joining the firm. µ