HP plans US$10b share buyback

Hewlett-Packard (HP) Company said Monday its board has authorised the repurchase of US$10 billion in shares.

The announcement comes as the personal computer maker is involved in a bidding contest with rival Dell Inc for the data storage company 3Par Inc.

HP said it plans to use the share buyback authorisation to manage share dilution from employee stock plans and to buy back shares opportunistically.

HP had US$4.9 billion left under its current US$8 billion repurchase plan at the end of July.

On Friday, HP raised its offer for 3Par to US$30 a share, or US$1.88 billion, and 3Par later threw its support for that offer.

Dell is considering raising its offer of US$27 a share.

Dell, based in Round Rock, Texas, has the right to match any higher bid and have its offer take precedence within three business days, starting on Monday, Dell spokesman David Frink said on Saturday.

The acquisition of the Fremont, California company would help both HP and Dell beef up their "cloud computing" businesses, delivering software, data storage and other services to customers over the Internet. 3Par has technology that doles out storage space on the fly and that would help keep data storage costs down.

They are looking for ways to replace profits lost in the PC business, which is shrinking due to lower prices and higher parts costs.

At the end of last quarter, HP had US$14.7 billion in cash and short-term investments.

It has 2.3 billion in outstanding shares.

- AP