Is Oracle Considering Buying HP?

There's an interesting article over at NYPost.com which brings up another potential suitor for HP now that the market capitalisation of the company has fallen to around $51 billion.

While we still believe that Apple could be a better match for an acquisition of HP, Josh Kosman says that Oracle might be in the best position to takeover a vulnerable Hewlett Packard.

Shares of HP have recovered by around four per cent at the time of writing but the company is still reeling from Friday's debacle that saw the company's stock fall by more than 20 per cent.

And even then, HP shares are cheap compared to near $50 (or twice the current price) that it commanded earlier this year and with former HP CEO Mark Hurd now on Larry Ellison's team, the next nine months are likely to be extremely tense for HP.

Should Oracle want to buy HP however, it could (and would) have to look for financing as it doesn't have the financial clout to go for it alone even with a market capitalisation of $127 billion.

Selling the PC division of HP could help finance the sale as would spinning off the Printers and Imaging division, one which has low appeal for Oracle.

The leitmotiv behind a potential HP acquisition by Oracle is explained by a Banker who says that Oracle will be in a better position to challenge archrival IBM with a combined marcap approaching that of Big Blue.