How The Reverse Morris Trust Will Deliver $8.5 Billion After Tax Value To HPE?
With its earnings release on May 24th, Hewlett-Packard Enterprise (NYSE:HPE) announced that it was spinning off its enterprise services unit into a separate entity. This unit would then be merged with Computer Science Corporation through the tax-free Reverse Morris Trust. HPE will own around 50% of the new entity. As a result, the company would be able to unlock value worth $8.5 billion for its shareholders. The management believes that HPE will be able to sharpen its focus on the next generation Software Defined Infrastructure that leverages the breadth of its portfolio, including its servers, storage, networking, and converged infrastructure, as well as its Helion cloud platform and software assets. The details of this transaction are as follows:
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