This Bloomberg piece has lots of good information contained within it. Contrast these statements. Here is how Lenovo see the deal:
'For the past 20 years, PCs were our core business...This deal will meet our strategy and give us a good foundation for the enterprise business. We hope we quickly can build it into $10 billion in annual sales, from $4.6 billion now'
And here is the IBM view:
'We were no longer in a position to get the kinds of returns that we wanted'
(nb the money raised was equivalent to 1% of IBM's EV - for them an almost irrelevance. I still cannot get excited about IBM as per my results write-up earlier this week here).
My view would be that ultimately Lenovo got the better deal here. They purchased the unit at x0.5 sales and used their cash balance in a way potentially more useful for their business than buying a stake in Blackberry as was previously mooted by the press. Additionally - and most importantly - significant overlaps clearly exist between their PC and server business. Lenovo previously had a fledgling 1% global market share. They are now global number three as per below. If I was HP or Dell I would be very concerned, judging how global PC market shares have shifted.
I don't hold Lenovo shares today. I used to but I bailed out when they hit my target in the HK$9s during the last few weeks of 2013.
Here's my observation from today's trading, admittedly on a day when the Hong Kong bourse ended down more than 1% due to global volatility in Europe/America on Thursday. The shares did spike on the news but lost nearly all this bump up (as shown in the last 5 days trading chart below). Quite possibly this was due to market volatility and/or fears that regulators may have some issues with the deal.
For me - at least until I see some more formal quarterly numbers - I will remain on the sidelines. There is not long to wait until the next set of numbers came out on the 30th January.