HP to Explore PC Spin Off, Acquire Autonomy

Update: HP has officially announced its intent to acquire Autonomy in what would amount to about $10.2 billion at $42.11 per share.

The exact words of the announcement are that they have: “announced the terms of a recommended transaction under which HP (through an indirect wholly-owned subsidiary, HP SPV) will acquire all of the outstanding shares of Autonomy for £25.50 ($42.11) per share in cash (the ‘Offer’). The transaction was unanimously approved by the boards of directors of both HP and Autonomy. The Autonomy board of directors also has unanimously recommended its shareholders accept the Offer.”

Word has been making its way throughout the tech news circuit that HP is in talks to buy database search software makers Autonomy for somewhere in the ballpark of $10 billion. Talk has also indicated that they would discontinue webOS devices and spin off their PC business.

HP has put out a press release addressing the talk.

HP announced that it is in discussions with Autonomy regarding a possible offer for the company. The company also announced its intentions to announce that its board of directors has authorized the exploration of alternatives for its Personal Systems Group. The company says it will consider a broad range of options that may include (among others) full or partial separation of this group from HP through a spin-off or other transition.

The company also says it plans to announce that it will discontinue operations for webOS devices (specifically the TouchPad and webOS phones), and it will continue to explore options to “optimize the value of webOS software going forward).

HP also announced preliminary results for its third fiscal quarter 2011, with revenue of $31.2 billion – up from a year ago, when it was $30.7 billion.

Here’s more on the financials from the release:

In the third quarter, preliminary GAAP diluted earnings per share (EPS) was $0.93 and non-GAAP diluted EPS was $1.10, compared with third quarter fiscal 2010 GAAP diluted EPS of $0.75 and non-GAAP diluted EPS of $1.08. Non-GAAP diluted EPS estimates exclude after-tax costs related primarily to the amortization of purchased intangible assets of approximately $0.17 per share and $0.33 per share in the third quarter of fiscal 2011 and fiscal 2010, respectively.

For the fourth fiscal quarter of 2011, HP estimates revenue of approximately $32.1 billion to $32.5 billion, GAAP diluted EPS in the range of $0.44 to $0.55, and non-GAAP diluted EPS in the range of $1.12 to $1.16. Non-GAAP diluted EPS guidance excludes after-tax costs of approximately $0.61 to $0.68 per share, related primarily to restructuring and shutdown costs associated with webOS devices, the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.

HP estimates full-year FY11 revenue will be approximately $127.2 billion to $127.6 billion, down from its previous estimate of $129 billion to $130 billion. FY11 GAAP diluted EPS is expected to be in the range of $3.59 to $3.70, down from its previous estimate of at least $4.27, and FY11 non-GAAP diluted EPS is expected to be in the range of $4.82 to $4.86, down from its previous estimate of at least $5.00. FY11 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $1.16 to 1.23 per share, related primarily to restructuring and shutdown costs associated with webOS devices, the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.