HP has finally concluded the $10.24bn acquisition of Cambridge-based enterprise search and BI software firm Autonomy. The £25.50-per-share offer was given the green light by 87 per cent of Autonomy's shareholders last night - a whopping 79 per cent premium on the stock price on 18 August when HP first lodged the bid. Reaching …
If one of the reasons Leo was sacked was the high Autonomy purchase price, then surely they should have dropped the purchase price to reflect that fact...or am I missing something?!?
That would be illegal under UK takeover rules.
"a whopping 79 per cent premium"
Recent events show that paying over the odds for acquisitions is a good predictor of imminent failure - Sun buying MySQL, Cobalt, ... and Microsoft buying Skype, Nokia (bought even though no shares changed hands, yet)....
At the very least it looks like desperation.
But, hey, good luck to both parties.
Whilst a lot of negativity was levelled at this deal, I think HP has made a shrewd purchase. Yes, the price is multiples of the share price and earnings, but these same analysts value other businesses at even higher multiples whilst the business does not turn a profit! Given Oracle's antics last-week and the flimsy reasons for Itanium - which did not make it into the formal lawsuit response - they are not in a good long-term position, even with the newly announced Exalytic system. (BTW based on a processor which Larry says he is killing off in their hardware lineup)
Make or Break?
IMO, this deal will make or break HP. Spending nearly the same cash HP paid for EDS for a company with 25 times less revenue is a risk.
Autonomy = "Next Big Thing" or "The New Google" ?
We will see, but it's a significant risk for HP.
They're going to have to treat the Autonomy staff better than the ex-EDS staff who were confronted with axe waving job cuts from the word go.
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