HP Rebuffs Offers For Autonomy, EDS and Opens New Executive Center
The Wall Street Journal is reporting that HP has received offers to buy both Autonomy and EDS. The companies have lost much of their value since being acquired by HP, forcing around 16 billion in write-downs during HP’s last two quarterly reports of 2012. This news come in light of reports that HP could attempt to sell off some of its divisions to grab revenue during its massive restructuring.
HP acquired Electronic Data Systems (EDS) in 2008 for $13.9 billion. The IT services company has become heavily integrated into HP, but its value has not held. In August HP announced its third quarter 2012 report included an impairment charge of around $8 billion related to EDS and HP’s larger restructuring efforts.
The Autonomy write-down is similar, but mired in accusations of fraud and mismanagement. HP announced in November that it would be taking an $8.8 billion write-down due to “serious accounting improprieties, misrepresentations, and disclosure failures” at Autonomy prior to its $10.2acquisition in 2011.
For its part, HP has held its ground and claims that the truth will come out when financial investigators in both the U.S. and U.K. are able to review Autonomy’s books. Meanwhile, nearly everyone involved has been sued on behalf of HP shareholders.
As for the possible sales of the EDS or Autonomy, it doesn’t appear the HP want to let them go. The WSJ report cites “people familiar with the discussions” as saying that EDS may be too tightly integrated with HP to sell. Autonomy would be easier to let go of, but HP has stated that it is committed to working with Autonomy in its current form.
In the midst of all these financial troubles, HP has just announced the opening of a new headquarters lobby and executive briefing center. The 37,700-square-foot facility, said HP CEO Meg Whitman, “…is a symbol of out turnaround and sets the tone for a continued path of progress and rejuventation.”