Nutanix shares spike on report of HPE interest

But one Nutanix partner says any deal between the duo would be a 'huge mistake'

Nutanix shares were trading up five percent to $29.75 after a Bloomberg report that Hewlett Packard Enterprise (HPE) had expressed takeover interest and even held discussions with Nutanix in recent months.

Bloomberg, quoting sources familiar with the matter, reported that the "talks between the companies have been on and off and it's unclear whether they will be able to reach an agreement over price".

Nutanix, whose current market cap stands at $6.94bn, could also opt to stay independent or another potential buyer could emerge, Bloomberg reported. HPE's current market cap is $21.5bn.

An HPE spokesperson said the company does not comment on rumours or speculation. A Nutanix spokesperson said the company also doesn't respond to market speculation.

The Wall Street Journal reported a month ago that Nutanix was actively shopping the company to potential buyers.

Spring, Texas-based edge-to-cloud tech giant HPE and San Jose, Calif.-based hyperconverged infrastructure software superstar Nutanix have had a long-standing partnership that began three years ago with a global strategic partnership that integrated Nutanix software on HPE servers. That deal resulted in Nutanix's Enterprise Cloud OS software being made available through the HPE GreenLake cloud pay-per-use service.

The HPE-Nutanix deal also resulted in the two companies creating integrated appliances that tie Nutanix software to HPE ProLiant and Apollo servers.

"I can certainly see the appeal of a potential deal for Nutanix, but the question I would ask is what would HPE do with Simplivity which competes with Nutanix," said a top executive for a solution provider who did not want to be identified.

One longtime Nutanix partner said any deal between the two companies would be a "huge mistake."

"I've been a part of acquisitions by HPE before," said Tim Joyce, president of Roundstone Solutions, a Nutanix partner in California. "HPE is where innovative companies go to die. Look what they did with SimpliVity. Why would Nutanix be any different?"