HP settles Autonomy acquisition lawsuit for $100 mn
10 Jun 2015
US technology giant Hewlett Packard Co has reached a $100-million settlement over a class action lawsuit pertaining to its controversial acquisition of British software firm Autonomy Corp in 2011.
The agreement with the lead plaintiff of the lawsuit PGGM Vermogensbeheer BV is related to the impairment charge taken by HP following the acquisition.
The Palo Alto, California-based tech giant is of the opinion that the case has no merit.
''While HP believes the action has no merit, it is desirable and beneficial to HP and its shareholders to resolve settle the case as further litigation would be burdensome and protracted,'' HP said in a statement.
HP's insurers will pay $100 million to a settlement fund that will be used to compensate persons who bought HP shares between 19 August 2011 and 20 November 2012.
HP and its current and former officers, directors, and advisors will be released from any Autonomy-related securities claims as part of the settlement, HP said.
The settlement is subject to the approval of the US district court for the northern district of California where the litigation is pending.
HP bought Autonomy for over $10 billion in 2011, after conducting due diligence, aiming to get a big boost to its data analytics and search capabilities.
However, the company later said that it was deceived by the British firm's founder over the actual value of the company.
Subsequently, HP took an $8.8-billion write-down the following year, with more than $5 billion related to ''serious accounting improprieties, disclosure failures and outright misrepresentations'' which came up during an investigation post acquisition. HP alleged that it had been misled into paying 64 per cent about Autonomy's market value.
Just a month after the acquisition, the then HP CEO Leo Apotheker was fired following his disastrous tenure which lasted hardly a year.
A year ago, HP settled a series of lawsuits from shareholders related to the acquisition and agreed to jointly sue former Autonomy CEO Mike Lynch chief financial officer Sushovan Hussain of accounting fraud. (See: HP to fight Autonomy in court after settling lawsuits with shareholders). In March, HP filed a $5.1-billion lawsuit in a London court.
