A decision by Hewlett-Packard to resume buying back its shares most likely signals that it has ended talks to merge with the data storage provider EMC.
In a short announcement on Wednesday, HP said it was resuming its existing stock repurchase program, suspended during its third fiscal quarter because it possessed “material nonpublic information.” The resumption of the share buybacks was because the company no longer had that information.
People briefed on the matter have said HP had been in talks to merge with EMC for months, which would have led to the creation of a big new technology titan. Still, the negotiations were difficult and halted several times over a number of issues, including price.
Reuters reported earlier on Wednesday that talks between the two companies had taken place as recently as last week, but that the discussions were definitively over.
Representatives for HP and EMC declined to comment.
That does not mean deal-making has been ruled out in the future for either of the technology giants. HP announced last week that it planned to split itself into two public companies, one focused on services for corporate customers and the other on printers and personal computers.
And EMC has faced strong pressure from Elliott Management, the activist hedge fund run by Paul E. Singer that owns about 2.2 percent of its shares. In a letter last week, Elliott formally demanded that EMC break itself apart to improve returns to shareholders.
A large factor behind that demand is a desire to have EMC spin off its 80 percent stake in VMware, the hugely successful virtualization software company with a market value of $37.5 billion. That means EMC’s stake in VMware alone makes up a majority of its $54 billion market capitalization.
Elliott has called for a tax-free spinoff of VMware, giving EMC money to finance a stock buyback of its own. But the hedge fund also suggested that other elements of EMC’s “federation” of businesses could be broken up in other ways, including bundling the company’s core storage operations together with its RSA security business into a unit that could eventually be acquired by the likes of Cisco.
EMC has acknowledged Elliott’s demands but has not yet decided on a course of action.