HPE adds KLA chair to board in pact with activist investor Elliott

By Jaspreet Singh and Svea Herbst-Bayliss

July 16 (Reuters) - Hewlett Packard Enterprise HPE.N added a veteran tech industry executive to its board on Wednesday, reaching a truce with activist Elliott Investment Management only weeks after completing a deal that had faced months of antitrust scrutiny.

Robert Calderoni, who had been chair and CEO of Ariba and chair and interim CEO of Citrix, and is currently chair of chip tools maker KLA KLAC.O, is joining the HPE board immediately and will chair a newly formed strategy committee, the company said in a statement.

Elliott, one of HPE's biggest investors with a stake of more than $1.5 billion, may also appoint one of its executives to HPE's board under the agreement that lasts at least a year and prevents the hedge fund from launching proxy contests.

The agreement comes after months of behind-the-scenes discussions between the West Palm Beach, Florida-based hedge fund and the Houston-headquartered cloud software company.

It also follows news earlier this month that HPE completed its $14 billion acquisition of Juniper Networks, after the deal was initially announced in January 2024 and faced a review by the U.S. Department of Justice.

The acquisition is expected to create a comprehensive, AI-native network provider with enhanced capabilities in AI-driven solutions. The new director will be in place to play a critical role in ensuring success of the Juniper transaction, said a person familiar with the settlement, who spoke on condition of anonymity.

Shares of HPE, which makes servers deployed in data centers for AI workloads, were up 0.5% at $20.38 on Wednesday afternoon. The stock has declined 5% so far this year, underperforming AI server rivals such as Dell Technologies DELL.N and the benchmark S&P 500 index .SPX.

Demand has boomed for AI servers as big tech companies and startups race to roll out generative AI services such as ChatGPT that require huge amounts of computing power. But the business has been a drag on margins because of the high costs of advanced chips designed by Nvidia NVDA.O, Advanced Micro Devices AMD.O and others.

Calderoni has decades of experience as an industry operator and played roles in the sales of Ariba to SAP SAPG.DE and Ansys to Synopsys.

He is also well known to Elliott, having worked closely with Elliott partner Jesse Cohn during his time on the Citrix board.

Elliott manages about $72.7 billion in assets and has a long history of pushing for changes at companies including Southwest Airlines LUV.N, Phillips 66 PSX.N and Texas Instruments TXN.O.

Elliott has gone ahead with campaigns globally this year despite market volatility that led many peers to settle. It won two seats at oil refiner Phillips 66 in May in a high-profile proxy fight.

HPE said its strategy committee will also include independent board directors Gary Reiner, Raymond Lane and Charles Noski.