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Tonight HP has announced that 87% of Autonomy shareholders have said ‘Yes’. So it’s now a done deal.
In my long time as an analyst I have never witnessed a takeover with so many twists and turns as this one. First there was the pretty ‘impressive’ 79% premium making the $11.7b deal the largest software deal ever and the largest in UK tech history. It accompanied an announcement from Leo Apotheker that HP would effectively be quitting its PC business and abandoning its tablet.
Then just four weeks later came the ousting of Apotheker to be replaced by Meg Whitman. Reread Anthony Miller's excellent post - They came to bury Leo, not to praise him. A surprising choice as she has no enterprise experience and her time at eBay was hardly stellar what with the Skype purchase. Whitman cast doubt on the PC spinoff.
As if that wasn’t a crazy enough tale, in the last week we had a pretty public scrap between Larry Ellison of Oracle and Mike Lynch. This all revolved around whether Autonomy had been touted to Oracle for sale back in April (or was it Jan?). Oracle apparently thought the price ‘absurdly high’. But the real issue was that under UK takeover law, if Autonomy had been ‘up for sale’, it should have been declared to the LSE. To be blunt, if Quatalyst (who didn’t even have a sale mandate at that time) is guilty of some sin then I can think of many others (including myself) who have committed that crime too. Every M&A person I know goes around saying “Have you looked at ‘x’? They would make a good fit and you’d probably only pay £y”.
Anyway, the spat got quite nasty with my favourite barb coming from Lynch. "Oracle seems a little confused about the sequence of events and origins of the data it has received, something that would suggest it needs better management of, and insight, into the unstructured data on its internal systems. We would be delighted to help."
So, what happens now?
Autonomy will be lead by Lynch reporting to Whitman. But how long with Lynch stay? Will Lynch get to control other parts of HP’s software strategy? If the chaos that is HP today continues for too much longer (and the signs are not too good) I can see Lynch and a lot of Autonomy’s newly enriched engineers walking. The ‘second’ scenario I outlined in my HP & Autonomy post of 22nd Aug 11 now looks the more likely.
And what of HP? There are even credible rumours that Oracle might bid for the whole lot! Certainly after the c50% fall in HP’s share price this year, they do look pretty vulnerable.
But, although I guess we all like a good soap opera, we have to remember all the staff, customers and shareholders for whom this is turning into more of a tragedy.
