HPE has reached an agreement with Elliott Investment Management after the activist investor built up a stake worth more than $1.5 billion (€1.3 billion). HPE is appointing a new board member and forming a strategy committee.
With a stake of more than $1.5 billion, Elliott becomes one of HPE’s five largest shareholders. HPE and Elliott have entered into a cooperation agreement that allows for information sharing between the two parties. This agreement also includes standstill, voting, and other provisions. Elliott will also have the right to appoint a representative to the board at any time until the end of the standstill period.
New director and strategy committee
Robert Calderoni, the current chairman of KLA Corp, will join HPE’s board of directors. Calderoni will also lead the newly formed strategy committee. This committee will work with Elliott to identify opportunities for operational improvement and strategic value creation.
“We appreciate the positive dialogue we have had with HPE’s Board and see substantial value ahead,” said Elliott partner Jason Genrich. “We believe Bob’s appointment to the board and his leadership of the new Strategy Committee will help HPE identify meaningful operational and strategic opportunities for shareholder value creation.”
Difficult period for HPE
HPE has recently faced operational challenges, including import tariffs and weak margins on server sales. The company announced in March that its profits for the year would be significantly lower than analysts had predicted. HPE also announced at that time that it would cut approximately 3,000 jobs.
The partnership with Elliott comes at a time when HPE is preparing for a new strategic phase. The activist investor has built a reputation through investments in tech companies such as Salesforce, SAP, and Citrix, which are often followed by changes in business strategy.
The effect of Elliott’s involvement remains to be seen, but for HPE, the partnership may offer new opportunities to address challenges and create shareholder value.