8-KSecurities & ListingCorporate ChangesExhibits & Filings

Hewlett Packard Enterprise Co 8-K Report, Unregistered Securities Sale (Mar 20, 2017)

Filed March 20, 2017For Securities:HPEHPE-PC

Summary

Hewlett Packard Enterprise Company (HPE) filed an 8-K on March 20, 2017, detailing amendments to its Articles of Incorporation and unregistered sales of equity securities. The primary focus of this filing is the creation and issuance of two series of preferred stock: Series A Junior Participating Redeemable Preferred Stock and Series B Junior Participating Redeemable Preferred Stock. These preferred shares were issued to wholly owned subsidiaries of HPE in exchange for shares of the Company's common stock. This action is directly related to the previously announced separations of HPE's enterprise services business and its software business, intended to ensure that the subsidiaries involved in these transactions do not receive shares of the spun-off entities.

Key Highlights

  • 1HPE created and filed Certificates of Designation for Series A and Series B Junior Participating Redeemable Preferred Stock.
  • 2The preferred shares were issued to wholly owned subsidiaries of HPE on March 17, 2017, under Section 4(a)(2) of the Securities Act of 1933, exempting them from registration.
  • 3The issuance involved an exchange of preferred shares for existing shares of HPE common stock held by these subsidiaries.
  • 4This move is linked to the planned separation of HPE's enterprise services business (combining with CSC) and software business (combining with Micro Focus).
  • 5The preferred stock issuance aims to prevent the subsidiaries from receiving equity in the spun-off enterprise services and software entities.
  • 6Series A Preferred Shares will be automatically redeemed for Class B common stock of Seattle SpinCo, Inc. (software business) at the Software Separation's effective time.
  • 7Both Series A and Series B Preferred Shares have redemption options for HPE common stock as detailed in their respective Certificates of Designation.

Frequently Asked Questions

The issuance of preferred stock was a strategic move designed to manage equity distribution during the complex separation and combination of HPE's enterprise services and software businesses. By issuing preferred stock to its subsidiaries in exchange for common stock, HPE ensured that these subsidiaries would not inadvertently receive shares of the newly formed entities (Everett SpinCo and Seattle SpinCo) that were being transferred to Computer Sciences Corporation and Micro Focus International, respectively.

This indicates that the preferred shares were issued without a formal registration statement being filed with the SEC. HPE relied on an exemption from registration, specifically Section 4(a)(2) of the Securities Act of 1933, which is typically available for transactions not involving a public offering, often considered private placements to sophisticated investors or, in this case, internal transfers between the company and its subsidiaries.

The Series A Preferred Shares are set to be automatically redeemed for shares of Class B common stock of Seattle SpinCo, Inc. (the entity holding the software business) at the effective time of the Software Separation. The Series B Preferred Shares can be redeemed by HPE for shares of HPE common stock, as per the terms in their respective Certificate of Designation.

This filing primarily addresses internal corporate restructuring related to planned divestitures. The issuance of preferred stock to subsidiaries in exchange for common stock, and the subsequent redemptions tied to the spin-offs, do not represent a direct offering or impact on the publicly traded common stock available to the general investing public at this specific time. The focus is on managing the equity structure during these complex transactions.