HP's Whitman will not sell Autonomy, EDS: sources

HP's Whitman will not sell Autonomy, EDS: sources

Summary: Despite accountancy "improprieties" and apparent financial conflicts between the teams, HP's Meg Whitman is batting away requests to buy two of its business units.

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TOPICS: Hewlett-Packard
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Hewlett-Packard has no plans to sell off its Autonomy and EDS business units, despite numerous offers to buy the units, according to The Wall Street Journal.

Speaking to sources familiar with the discussions, the computing giant's chief executive Meg Whitman is reportedly batting away the offers left, right and center, and will retain hold of the two units. The Journal said that HP is receiving "expressions of interest" from a range of potential buyers regularly, sources say.

Shares in HP rose by more than 4 percent at market close on the New York Stock Exchange as a result of the news. 

hpq-nyse
$HPQ at market close on January 16, after rising 4 percent on the news. Image: Google Finance

The rumors began when HP said in a 10-K filing with the SEC that the firm will "also continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives," language which was not included in previous filings. 

HP, which remains at the top of the PC manufacturing leaderboard, according to recent IDC figures, recently said in its fourth quarter filing with the U.S. Securities and Exchange Commission (SEC) that Autonomy had engaged in "serious accounting improprieties" before it was bought by HP in 2011, and the computing giant ultimately had to swallow an $8.8 billion charge as a result.

The filing also noted:

When we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives. We may also dispose of a business at a price or on terms that are less desirable than we had anticipated.

That sent a signal out to many to suggest that HP was going to ditch the two units, and would find a buyer to get rid of at least Autonomy. Alas, it may have not been the case.

It is thought, reports AllThingsD, that HP lawyers wanted to include the language -- despite it not representing the view of Whitman herself -- because she had reiterated numerous times that HP will remain as one giant bundle of computing love.

After all, if you had just taken an $8.8 billion shot to the face and survived, wouldn't you want to keep hold of the bullet as a memento?

We've put in questions with HP but did not hear back at the time of writing. If we hear back, we'll update the piece.

Topic: Hewlett-Packard

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  • HP's Whitman will not sell Autonomy, EDS: sources

    one of the reason for the compaq acquisition is to expand hp's presence in the lucrative market dominated by ibm. so, even the idle talk of considering the sales of any of its consulting arm is absurd. they have the resources and manpower that they spent a helluva lot of cash, and then throwing them away. what a waste ... well, if they do not know how to utilize them, it might be better indeed to sell them.
    kc63092@...
    • Think 'Palm'

      RE: " they spent a helluva lot of cash, and then throwing them away" - ever hear of Palm
      Tylr_Durden
  • Confusion Square

    Did the bullet to the face analogy originate with Ms Whitman or Mr. Whittaker? It is not at all like keeping the bullet that shot one. It was like a predecessor buying Florida swampland — or a Florida mansion, who knows — after investigating and then a successor comes in and has to clean up a mess. This isn't perfect either as the successors were the ones who approved the predecessor's pitch.

    Meanwhile, why do they keep getting offers and why do they turn them down? Are they further discounted from the 90% HP has suggested was the fraudulent part of their purchase? Would selling quantify the value lost? Or complicate the civil suit that HP seems to intend, with discovery courtesy of the government stock regulators? That's assuming that this news via rumors is remotely true. If there are serious bids that represent a gain on the written-down value of the asset, it is a violation of the fiduciary responsibility to the shareholders to pass on the offer, just because.

    The one through line of official communications from Whitman is "Sure, things are bad, but we know what we're doing." So Autonomy is an object of business desire, now that HP has said it was suckered in buying it for billions. It really has some value.

    Okey-dokey.
    DannyO_0x98
  • HP Can't Sell Autonomy

    HP has integrated the flagship Autonomy technology, IDOL search engine, into several in house and resale products, they cannot sell it. What they may be able to do is sell off the rest of the Autonomy portfolio but even those products are integrated with IDOL ...... IDOL is Autonomy and HP cannot let IDOL go now or in the near future.
    Tylr_Durden