HP's $12 Billion Autonomy Deal Finalized

(Reuters) - Hewlett-Packard completed its $12 billion buy of British software firm Autonomy on Monday, the centerpiece of a botched strategy shift that cost ex-chief executive Leo Apotheker his job last month.

HP said its 25.50 pounds-per-share cash offer -- representing a 79 percent premium that many HP shareholders found excessive -- had been accepted by investors representing 87.34 percent of the company's shares, well ahead of the 75 percent threshold needed.
Buying the Cambridge, England-based firm, whose software searches unstructured data like emails, phone calls and tweets that do not fit into traditional databases, was one of a raft of surprise radical reforms announced by HP's Apotheker in August.

Apotheker also decided to close HP's Palm Web OS tablet and smartphone unit and sell or spin off its PC division.

The rushed announcements and concerns about the lofty price offered for Autonomy sent HP's stock, and Apotheker's credibility, plunging.

But according to analysts, it would have been nearly impossible under British takeover rules for HP to extract itself from the Autonomy deal.

Former eBay Inc CEO Meg Whitman said after being installed to replace Apotheker that Autonomy was integral to HP's software expansion, and the acquisition was proceeding as planned.

Controversy about the deal was further stoked by an extraordinary spat between Autonomy's founder Mike Lynch and HP's rival Oracle last week.

Oracle's outspoken CEO Larry Ellison said he had also been approached but had no interest in buying Autonomy at what he called an "absurdly high" price.

Autonomy will operate as a separate business unit with Lynch leading the division, the company said.

HP's offer to purchase the remaining Autonomy shares also remains open, it said.
(Reporting by Poornima Gupta in San Francisco and Paul Sandle in London, editing by Bernard Orr)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[PoorRichardsHeartache]

02:36 PM on 10/04/2011

One of the joyous things about being a founder is you get founders stock. When the board finally brings in competent management, the founder reaps the rewards, typically unjustly. And, then they get rewarded with a new job they cant do either.

[Doug Watt]

09:52 AM on 10/04/2011

Time to sell HP, they're clearly on the path to destruction.

[liberalcomesfromliberty]

09:07 AM on 10/04/2011

He's a failure but yet he reaps millions for it. More high class welfare.

[2ManyQuestions]

08:58 AM on 10/04/2011

A 79% premium?

That's far too high for goodwill. There are two problems with this deal:

1. They could have gotten it for less goodwill
2. They will never make up the goodwill amount, i.e. they just destroyed shareholder value

This should trigger a shareholder lawsuit. Sooooooo glad I don't own HP stock.

[Ipanema]

08:39 AM on 10/04/2011

As a proud-owner of an HP TouchPad tablet (it beats the iPad2 hands down), I say the Whitman lady has to restore webOS and the TouchPad. It is the tablet in the market (if you can get it) with the best man-machine interface featuring a innovative system of cards that resembles Windows in its multi-tasking nature and makes for excellent workflow (can play music and surf the Net at the same time, which iPad 2 cannot do).

[Doug Watt]

09:53 AM on 10/04/2011

Sure, Meg.

[Roommate]

08:33 AM on 10/04/2011

Meg Whitman you have over $800 million dollars, why do you even want a hard stressful $10 million/yr job

[Doug Watt]

09:53 AM on 10/04/2011

So she can give herself a raise and dismantle HP.

[lesterfairley]

10:05 AM on 10/04/2011

She just wasted over $100 million on a failed election campaign. Needs to recoup some of those loses

[tiredandworried]

06:47 PM on 10/04/2011

I thought I read she accepted a $1/year salary.

[trumbull desi]

08:19 AM on 10/04/2011

HP's board is awful, and in chasing profit they're tearing apart this company limb by limb.

[mherrera]

08:04 AM on 10/04/2011

That's a nice first deal for Meg who believes in buying anything that's for sale at any price and then figuring out what to so with it.

[Printer Repair]

07:48 AM on 10/04/2011

Hope it's a good move HP!

http://www.titaniumprint.com

[Z2a]

08:13 AM on 10/04/2011

Spam much?

[loveemall]

07:31 AM on 10/04/2011

With this deal and Freaky Maggie at the helm HP will be in bankruptcy court within 2 years.

[trumbull desi]

08:17 AM on 10/04/2011

And that's very sad. I happen to work for a competitor, but I don't cheer on the fading of this American built company.

[yoyodyne666]

03:13 AM on 10/04/2011

I'm beginning to think my smart phone may be too smart for my own good. What are they doing with all this information about us? Just imagine what you could do with it if you chose not to do good.

[yoyodyne666]

03:10 AM on 10/04/2011

"whose software searches unstructured data like emails, phone calls and tweets that do not fit into traditional databases,"

Interesting, what are they searching for?

[kolys]

08:08 AM on 10/04/2011

Having worked for an Autonomy competitor... they're looking for business intelligence. If you can empirically know from these phone calls, tweets and emails that 35% of your customer base is angry about a specific aspect of your business, it's a lot easier to quantify the value of improving that.

[calisquare]

02:34 AM on 10/04/2011

LOL Larry Ellison didn't want it. He'll buy almost anything.

[trumbull desi]

08:18 AM on 10/04/2011

Now that's funny ....

[helioszephyr]

02:01 AM on 10/04/2011

... and Larry E. will buy HP for $6B... Smart man.
The only viable product division at HP is (was) printers... and they'll sell that as well.
HP's wheels are rapidly coming off.

[KOisGod]

01:41 AM on 10/04/2011

12 billion for a tweeter data mining company? For what? To find out which Starbucks peoples friends are at?

Are these people insane? And now they've brought that ditsy ebay broad on-board as CEO? The HP founders are yelling from their graves!

Invent

Indeed, invent the best way to destroy a once great company.