Hewlett-Packard Co, the com­pa­ny cho­sen by the Kam­la Per­sad-Bisses­sar ad­min­is­tra­tion as the ven­dor of over 20,000 lap­top com­put­ers, said on Mon­day its board ap­proved the buy­back of an ad­di­tion­al $10 bil­lion of shares to boost in­vestor con­fi­dence as it finds it­self in­volved in a bid­ding war for high-end da­ta stor­age com­pa­ny 3PAR Inc.

HP, the world's top per­son­al com­put­er mak­er, and Dell are com­pet­ing to ac­quire 3PAR in an in­tense auc­tion that start­ed last week. On Fri­day, HP raised its bid for 3PAR to ap­prox­i­mate­ly US$2 bil­lion. The com­pa­ny is al­so cast­ing about for a chief ex­ec­u­tive to re­place Mark Hurd, who re­signed as CEO on Au­gust 6 af­ter an in­ter­nal in­ves­ti­ga­tion found he had fal­si­fied ex­pense re­ports to con­ceal a "close per­son­al re­la­tion­ship" with a fe­male con­trac­tor.

An­a­lysts saw the an­nounce­ment of the buy­back as a mes­sage to in­vestors that the com­pa­ny is sta­ble and fi­nan­cial­ly strong. "It's try­ing to demon­strate that it's on sol­id foot­ing and not drift­ing with­out a leader," said Morn­ingstar an­a­lyst Michael Holt. HP in­ter­im CEO Cathie Les­jak said in a state­ment that HP planned to re­pur­chase at least US$3 bil­lion worth of shares in its fis­cal fourth quar­ter, which be­gan Au­gust 1.

Jef­frey Fi­dac­aro, an­a­lyst at Susque­han­na Fi­nan­cial Group, said he was en­cour­aged by the an­nounce­ment and is nudg­ing up his es­ti­mates on HP's earn­ings for the 2011 and 2012 fis­cal years. He now sees 2011 earn­ings of US$5.05 per share, a pen­ny above his ear­li­er fore­cast, and 2012 prof­it of US$5.57 a share, two cents high­er than be­fore. HP bought back US$2.6 bil­lion of its shares in its fis­cal third quar­ter as part of an US$8 bil­lion re­pur­chase plan ap­proved in No­vem­ber 2009. Un­der that au­tho­ri­sa­tion, HP had US$4.9 bil­lion re­main­ing to buy back its stock as of the end of Ju­ly.

There is no time lim­it on ei­ther pro­gramme. The com­pa­ny, in a state­ment, said the ad­di­tion­al US$10 bil­lion is part of an ef­fort to man­age the num­ber of out­stand­ing shares in ex­is­tence. Pro­grammes like em­ploy­ee stock plans tend to in­crease the over­all amount of stock in the mar­ket, and HP said the buy­back would help counter that di­lu­tion. HP had US$14.7 bil­lion of cash and equiv­a­lents as Ju­ly 31, and a cur­rent mar­ket cap­i­tal­i­sa­tion of near­ly US$90 bil­lion. (Reuters)