Monday, August 30, 2010
HP, 3PAR, and Finding a new CEO
We have all watched with some fascination as HP and Dell fight it out in an all-out bidding war for 3PAR, the young data storage company. Many writers, including this article from the CNN Money website, have speculated as to whether the winner of this bidding war will ever be able to earn an attractive return on investment, given the high price premium being offered. However, I find another aspect of this bidding war perhaps even more intriguing. HP does not have a successor to Mark Hurd at this point (Cathie Lesjak is serving as interim CEO). If HP wins the bidding war, how will that outcome affect the search for a new permanent CEO? Will potential candidates be at all reluctant to take the job, given that they will be on the hook for making this very pricey acquisition pay off? I think that issue will be an interesting one to watch in the coming months, if HP ends up acquiring 3PAR. Of course, the 3PAR deal does not represent a large fraction of the market value of HP, but still, this highly visible deal will attract attention. If HP pays a very high premium for the firm, investors will be watching to see if the deal pays off. A new CEO may also have questions about the integration process. What promises will be made, if any, to the 3PAR managers and employees as the deal is made? Will the potential new CEO be willing to live with any commitments made prior to their arrival? To me, these questions will be fascinating ones to consider in the days and months ahead.