How does HP make a mistake this big? And I mean big — our number of the day: $8.8 billion.
That’s how much HP says it overpaid for a British software company. Last year, Hewlett bought Autonomy for $11.1 billion. Today HP announced that —oops — Autonomy is worth only a fraction of that.
Hewlett said Autonomy misrepresented its finances. But if HP really got hoodwinked on this deal, how? How on earth could they miss something they claim is that big? Autonomy was audited by Deloitte and their work was audited by KPMG. Those are two of the “Big Four” accounting firms. They didn’t notice anything? Really?
This sale also involved a list of banks and law firms on both sides of the deal that are supposed to be the best in the business, including Goldman Sachs, Citigroup and Barclays. Plus, it’s not as if there were no warning signs. Before the acquisition, Oracle had considered buying Autonomy for $6 billion and decided even that was overpriced.
Whether Autonomy did anything wrong will take time to decide, but HP’s mistake is simply incomprehensible.
This is like buying a Rolls Royce, then driving it around for a year before you figure out it’s a Yugo.