Hewlett Packard took an $8.8 billion charge for their 2011 acquisition of Autonomy Corp.back in November. HP accused Autonomy CEO Mike Lynch of fraud and even considered filing a lawsuit against him. Some new details about the acquisition have emerged according to The Wall Street Journal. The WSJ reports that HP executives had learned about some accusations against Autonomy beforehand, but decided to ignore them.
Hewlett Packard announced earlier this month that they would be taking an $8.8 billion charge over Autonomy due to “accounting improprieties,” “disclosure failures,” and “outright misrepresentations.” Former Autonomy CEO Mike Lynch believes that he is being used as a scapegoat. Below is a letter that Dr. Mike Lynch wrote to the board of directors at HP.
Hewlett Packard is going to take an $8.8 billion charge for its 2011 acquisition of software company Autonomy. HP said that they were disappointed of some of the “accounting improprieties” and misrepresentations that Autonomy had.
Hewlett Packard acquired Autonomy for $10.3 billion in August 2011 under Leo Apotheker’s watch. Autonomy was profitable at the time of their acquisition, but under HP’s umbrella the company has seen significant declines in their licensing revenue. Autonomy founder Mike Lynch is now stepping down and he is being replaced by HP chief strategy officer and EVP of enterprise software Bill Veghte. In HP’s Q2 earnings release, the company said that this is being done to improve Autonomy’s performance. Below is a clip from the company’s earning announcement — I have bolded the part about Autonomy.
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Hewlett-Packard Company (NYSE:HPQ) has agreed to buy Autonomy Corporation plc (LON:AU) for $10.3 billion. After the acquisition is complete, HP would spin off their PC business to focus on enterprise. Autonomy shareholders would receive $42.11 per share after the acquisition. This is a 64% premium from the day before the acquisition offer. Continue reading →
HP is about to make a big announcement, Bloomberg reports: it may be spinning out its PC business, possibly buying Autonomy Corp and definitely announcing its quarter earnings after the markets close today. Autonomy is a software company, and rumors say HP may be paying $10 billion for it. [Business Insider]
