Oracle CEO Larry Ellison has his eyes on long time rival Hewlett-Packard, or at least its enterprise business. According to an unnamed insider there’s a chance Oracle may acquire HP now that the latter’s stock is falling, saying that this move is “inevitable” if HP’s shares will continue their decline. This news comes in light of an announcement about HP’s recent earnings call stating the company will likely spin-off its PC unit, essentially breaking itself up.

There are several other aspects to the story though that make it a lot more complex from Oracle’s end, Eric Savitz of Forbes highlighted in this piece. The first one is the massive price tag on Hewlett-Packard as a whole:

“The current HP market cap is $50 billion; not that long ago it was $70 billion. Oracle has a little under $29 billion in cash; it would have to lever up to buy HP, even if you knock off $10 billion or $15 billion for the potential PC spin.”

Another thing is that HP’s printer business is not going to be spun off anytime soon, meaning Oracle’s earnings will take an even bigger hit should it decide to carry out a decision to buy the company.

There are a lot of difficulties that would come with such a move, but the advantages Oracle may just be worth it. HP is big in the server and storage markets,  and its portfolio and current market positioning would definitely boost Oracle’s overall competitiveness with IBM.

HP may be a good acquisition target when it finally splits off the Personal Systems Group, but for now it shows no sign of slowing down.  Its stock is up  97 cents, or 4.1 percent to $24.57, and had several updates last week. The company introduced the HP Compaq 8200 Elite All-in-One Business Desktop, and won a $72.3 million contract with the U.S. Centers for Medicare & Medicaid Services.