Oracle publishes Autonomy 'shopping' slides
A serious war of words has broken out between Oracle and Autonomy, which is in the process of being bought by HP.
In the latest episode of a back-and-forth argument over Autonomy's value and willingness to sell itself earlier this year, Oracle has published a series of slides depicting Autonomy's financials. It says the slides prove Autonomy chief Mike Lynch has spoken untruths.
In an earnings call last week, Oracle chief Larry Ellison said British information management software firm Autonomy had been "shopped" to his company earlier this year, but Oracle had decided the price was too high. HP ended up buying Autonomy for £7.1bn in August, in a move that was likely a major factor in HP's board sacking chief executive Leo Apotheker.
According to The Wall Street Journal, Lynch denied on Tuesday that his firm had tried to sell itself to Oracle. He said it was possible that a bank had approached Oracle with a list of companies, including Autonomy, that Oracle might want to buy. Oracle then hit back on Wednesday, saying it still had the slides from the Autonomy presentation.
"Either Mr Lynch has a very poor memory or he's lying," Oracle said in a statement. "'Some bank' did not just happen to come to Oracle with Autonomy 'on a list.' The truth is that Mr Lynch came to Oracle, along with his investment banker, Frank Quattrone, and met with Oracle's head of M&A, Douglas Kehring and Oracle President Mark Hurd at 11am on April 1, 2011."
"After listening to Mr Lynch's PowerPoint slide sales pitch to sell Autonomy to Oracle, Mr Kehring and Mr Hurd told Mr Lynch that with a current market value of $6bn (£3.8bn), Autonomy was already extremely over-priced," the statement continued. "The Lynch shopping visit to Oracle is easy to verify. We still have his PowerPoint slides."
Lynch then seems to have admitted taking part in the April meeting. Oracle issued a further statement later on Wednesday, quoting Lynch — it is not clear where they got the quote from — as saying: "The company was not for sale. I recall meeting with Mark and someone else I believe called Doug. At the start of the meeting they joked that Frank was there to sell them something. Frank and I made it clear that was not the case. We then met and had a lively discussion about database technologies."
In its second statement of Wednesday, Oracle said it was posting the presentation slides, which were "all about Autonomy’s financial results, Autonomy’s stock price history, Autonomy’s Price/Earnings history and Autonomy’s stock market valuation".
"We have put Mike Lynch's PowerPoint slide sales-pitch up on the Oracle website with the hope Mike Lynch will recognize his slides, his memory will be restored, and he will recall what he and Frank Quattrone discussed during their visit to Oracle last April," the statement read. "Yesterday, the Autonomy CEO did not remember having any meeting with Oracle. Today, he remembers the April meeting and inaccurately describes how it came about and what was discussed. Tomorrow, he will need to explain his slides."
The slides, drawn up by the investment bank Qatalyst, are marked on Oracle's site as having been "sent to Mark Hurd".
Oracle's broadside against Autonomy will prove highly embarrassing for HP, which paid almost twice as much for Autonomy as the sum Oracle now says it thought was too much. HP's Autonomy buy is the second-biggest ever purchase of a software company, after Symantec's $13.5bn Veritas Software acquisition.
It is not clear whether there is a link between the current argument and Hurd's history at HP. Hurd, Oracle's co-president for the last year, was chief executive at HP until August 2010, when he was forced out after a probe into alleged sexual harassment revealed expenses-related misconduct.