Discussions between the computer giant and the top-ranked accounting firm were made public in September. At that time, the companies were looking at a price tag of $17 billion to $18 billion, but since then, many tech stocks, including HP's, have plummeted. HP's shares closed at $46.50 on Tuesday, off from an adjusted close of $56.91 per share on Sept. 11, when talks between the firms were confirmed.

"While it's true that when we confirmed negotiations were under way we were discussing a valuation in the $17 to $18 billion range, given the current market environment we're re-examining every aspect of the transaction, including price," Carly Fiorina, HP chair and chief executive, reportedly said in a speech here Tuesday.

According to a report by Bloomberg, Fiorina told listeners at a Prudential Securities conference, "The strategic rationale for this transaction remains compelling, but we won't complete a transaction unless we're certain that we can provide sufficient return to our share owners and employees."

News accounts report insiders as saying that the cash component of the deal, originally planned to be about half the asking price, could be raised to help preserve the headline size of the transaction. HP would probably still look for a drop in the price to at least $15 billion, Bloomberg said. Reports speculate the possibility of a tax savings of as much as $4 billion based on the deal's structure could sway HP to come up with more cash.

"We're intent on doing it right," Fiorina said, according to Bloomberg. "I mean ensuring that we can achieve the appropriate value, appropriate integration and appropriate retention plans."

While PwC spokesman Steve Silber confirmed that, "negotiations are continuing," Silber said he couldn't comment because the firm is in a quiet period during the talks.

HP couldn't be reached for comment.

The deal has reportedly raised concerns among HP investors, who fear that the challenges of integrating a large consulting practice could slow growth, and that PwC employees may walk if the deal closes, Bloomberg said. Shareholders also worry that customers might feel like they're being pushed to buy Hewlett-Packard gear, rather than getting independent advice, according to the report.

-- SmartPros News Staff

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