It’s becoming increasingly clear that Hewlett-Packard isn’t going to sell its PC business — formally known as its Personal Systems Group — to anyone. Instead it’s going to do what I suggested it would, and distribute the assets to shareholders, mainly because of the tax advantages: There are no taxes on distributions, but there are taxes on sales.
In fact, it’s so clear that HP Chairman Ray Lane appeared on Bloomberg West yesterday and outlined the plan: “The intention of our board has always been to spin it to our shareholders,” he told host Emily Chang. HP will spend the next four months or so studying the intricacies of a spinoff and decide whether or not to actually do it. Assuming HP decides to go forward with the spinoff, expect it to take another eight months — roughly a year from now, Lane said — to get it done.
Lane also talked about the last hurrah of the HP TouchPad which sold abysmally at Best Buy and other retailers until the price was slashed to the bone. “There’s obviously demand at a certain price point for TouchPad,” he said. Too bad that price point is one that has HP losing money on every unit sold.