NEW YORK: Hewlett Packard Enterprise Co struggles to interest some investors and other tech companies in buying assets that the US government required be sold to clear its takeover of Juniper Networks, receiving bids that ranged between US$1 and US$15mil, according to court records.
HPE’s efforts to sell its Instant On networking business were detailed in court records that outline the steps it’s taking to comply with a June settlement with the US Department of Justice (DoJ).
That agreement is still being challenged by a group of states, arguing that it doesn’t do enough to protect competition.
The court records provide a rare window into the usually secret asset sales required of companies settling merger cases with the federal government. Buyers hold most of the leverage and typically negotiate steep discounts.
But HPE’s difficulties also spotlight whether the assets being sold are meaningful enough to address potential harm to competition caused by the merger.
The DoJ and HPE said they are, but the state attorneys general dispute that.
Extreme Networks Inc and India’s Tech Mahindra Ltd passed on bidding for Instant On, according to court documents.
Cybersecurity company Fortinet Inc offered between US$5mil and US$15mil.
A pair of tech investors, Kevin Duffy and Eric Zimits, offered only US$1, proposing to turn the product into a stand-alone company but needing additional investments from HPE because of its “lack of management focus” on the product.
“The business is not profitable,” wrote Duffy and Zimits, former executives at smaller tech companies.
They said in their bid that HPE’s Instant On had “flat revenue and gross profit margins that are well below industry average”.
HPE spokesperson Adam Bauer said in a statement that the company “will not comment on bidders in the divestiture, who had an expectation of confidentiality and are public only because the state attorneys general violated the judge’s order to file under seal”.
HPE has said in other filings in the case that Instant On generates US$100mil in revenue. The court documents didn’t include a response from HPE to the claims about how that business compares to industry averages.
The divestitures stem from a lawsuit originally filed by the DoJ in January 2025 to block HPE’s takeover of Juniper, alleging the transaction would harm competition in the market for enterprise wireless equipment. The agency reached a settlement in June, only days before a scheduled trial in the case.
The original federal antitrust case focused on two different networking products, HPE’s Aruba and Juniper’s Mist, which are frequently used by large companies, universities and hospitals.
Instant On is a software product that helps small and medium-sized businesses manage the hardware access points and devices on their WiFi networks.
State attorneys general are challenging the DoJ settlement, arguing that the proposed Instant On divestiture won’t replace the competition lost by the merger.
The settlement has been mired in controversy amid allegations that Trump administration officials overrode decisions made by the antitrust division and agreed to the deal after a process that involved lobbying by individuals close to the president.
At a hearing on Monday in San Jose, HPE lawyer Samuel Liversidge told US District Judge Casey Pitts that the company had selected a bidder for Instant On.
He didn’t disclose the name except to say it was “one of the Tier One competitors in this space”.
Software firm CXApp Inc, networking company Fatpipe Inc and Cornerstone Capital Holdings also submitted bids, according to a December sworn statement by an HPE lawyer. — Bloomberg
