HP's fear of Oracle takeover forced it to replace CEO: report

The board of Hewlett-Packard (HP) is reported to have replaced CEO Leo Apotheker with former eBay CEO Meg Whitman, on concerns that the company's plummeting shares would make it vulnerable to a takeover bid from Oracle Corp.

With Oracle's history of aggressive acquisitions and the ongoing public feud with HP, it would not be surprising if Oracle goes directly to HP shareholders with a takeover offer for the world's largest PC maker, whose stock has dropped 47 per cent or lost a whopping $60 billion of its market value since the past two years, a Bloomberg report said.

The takeover possibility gained strength after HP lost $12 billion of its market value in August when it offered to buy British software maker Autonomy for $10.3 billion, according to the report.
 
Oracle CEO Larry Ellison has made things worse for HP, when he said that the company is paying over the hill for Autonomy. Ellison claimed that Autonomy had earlier, in April, tried to shop itself to Oracle and his company had valued the deal at around $6 billion.

Yesterday, Autonomy CEO Mike Lynch told the Wall Street Journal that Ellison was mistaken, and that the company did not try to sell itself to Oracle. Oracle retorted by saying that it had PowerPoint slides to prove that Lynch was lying.
Oracle took the spat one step further by uploading on its website a link to a URL titled "please buy Autonomy", which shows PowerPoint slides that Autonomy used when it tried to shop itself to Oracle.

This latest spat could come in handy for Oracle should it decide to make a hostile bid for HP, according to Bloomberg.

The HP-Oracle rivalry dates back to 2009, when Oracle acquired Sun Microsystems, and since then it only increased after Oracle this year hired HP's CEO Mark Hurd and made him Oracle's co-president.

However, Oracle cannot make a bid for HP until 2012 because a clause in its agreement with HP that prevents Hurd from using confidential information when he was HP CEO.

The Wall Street Journal this week reported that HP has hired Goldman Sachs to help it fend off activist shareholders, who could demand further changes in the management and force the company to reverse some of its newly announced policies.