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Hewlett-Packard CEO Meg Whitman in April told reporters in London that Autonomy, the British software maker that it bought for $11.3 billion in 2011, was a key part of HP’s future despite the accounting issues that cost the tech giant another $8.8 billion in charges.
That declaration reportedly came after HP executives pitched selling the controversial business unit to SAP, an offer the giant software maker rejected.
In a report in The Times of London May 13, SAP Co-CEO Bill McDermott said his company was approached by HP about Autonomy and that the software company was available, but that his company declined. The Times had reported that Whitman had met with SAP executives about Autonomy.
“We were aware that it was on the market at one time, but were never seriously interested in Autonomy,” McDermott told The Times.
The Autonomy deal, which was done during the 11-month tenure of Whitman predecessor and ex-SAP CEO Leo Apotheker, has been a costly and embarrassing one for HP. Just more than a year after closing the deal—which was made while Whitman was on HP’s board of directors—HP announced it was taking an $8.8 billion write-down, due in large part to accounting problems at the software company.
HP executives have accused Autonomy executives of playing with the financial numbers to make the company look stronger than it was in the lead-up to HP’s closing the deal. Ex-Autonomy CEO Mike Lynch has denied the accusations and said that any problems come from HP’s mishandling of the company after the sale. He has said he expects the issues to be settled in court.
However, the deal could become an even greater financial strain to HP, which is facing myriad lawsuits over the Autonomy acquisition. A $1 billion lawsuit filed earlier this month by a group of shareholders accused HP officials of not doing their due diligence in the investigating Autonomy before the deal was made, and said that HP—desperate to get into the growing big data software space—vastly overpaid for software that was “an outdated product that was not user-friendly.”
The shareholders also claim in the lawsuit that HP executives tried to back out of the sale at the last minute, but were told by advisors that they couldn’t under U.K. law.
Autonomy’s software makes it easier for organizations to quickly search massive databases. SAP has similar software called Hana.
Among those named as defendants are Whitman, Apotheker, Lynch and former board Chairman Ray Lane (who resigned as chairman last month but remains on the board).
An HP spokesperson told Business Insider that it actually was SAP that approached HP.
“Contrary to reports in the media, HP has no interest is selling Autonomy,” the spokesperson said. “During the past year, we’ve received inquiries from SAP about purchasing HP software assets, and time and again we’ve said ‘no.’ We believe Autonomy will play an important role in HP’s long-term strategy.”
Whitman has been under pressure from some analysts to sell off some of HP’s assets as the company looks to get onto stronger financial footing. However, Whitman has argued throughout her tenure that the company is better off with all its pieces in the fold, and that she has no intention of selling off Autonomy or any other business unit.
“We remain committed to Autonomy; we remain committed to the brand, to Cambridge, to the U.K. [where Autonomy is based],” she said during her April trip to England. “It is an almost magical technology. … It plays into a big shift in the market, the area of big data, which HP should be in.”