Hewlett-Packard's Autonomy acquisition highlights pattern of bad ideas
BY AP Wire Service
Sunday, November 25, 2012
11/25/12 at 3:18 AM
SAN FRANCISCO (AP) - Hewlett-Packard's $9.7 billion acquisition of Autonomy seemed like a bad idea long before last week's allegations of an accounting scandal made clear it was a deal that should never have happened.
It's the latest in a cavalcade of costly blunders at HP. The Silicon Valley pioneer has squandered billions of dollars on ill-advised acquisitions.
On Tuesday, HP took an $8.8 billion write-down for the Autonomy acquisition. Hewlett-Packard Co. CEO Meg Whitman alleged that executives at Autonomy used various accounting tricks to make the British software company appear more profitable.
The Autonomy deal may amplify the pressure on HP to reshuffle its board of directors, which already had been overhauled after a series of previous embarrassments. The debacles, dating back to 2006, include prying into the personal phone records of reporters covering the company and its widely criticized hiring of Leo Apotheker as CEO after the company's previous leader, Mark Hurd, resigned amid questions about his relationship with a female contractor.
Although HP says it was duped into paying too much for Autonomy under the since-fired Apotheker, the deal ultimately was approved by 10 of its current 11 directors, including Whitman.
Shareholders are seething with renewed anger over the deal. The allegation that Autonomy had been "willfully" deceptive leading up to HP's purchase raises the specter of a criminal investigation. It also opens a torrent of potentially distracting class-action lawsuits on behalf of shareholders alleging HP's board was negligent.
Original Print Headline: HP's Autonomy buy shows ongoing pattern of bad ideas