HP extends deadline for US$11.2bn Autonomy offer

13 Sep 2011

Autonomy co-founder Mike Lynch

Having met with just 41.6 shareholder approval for its acquisition of Irishman Mike Lynch’s software company Autonomy at the first closing date, HP has extended the deadline to 3 October for Autonomy shareholders to take up the offer.

Analysts seem surprised at the lukewarm acceptance, considering the strategic importance of Autonomy’s infrastructure technology to HP’s future. But it is likely the slow response could be an expression of bewilderment at the other strategic decisions HP is taking, such as ditching its personal computer business and a public U-turn on its webOS strategy.

Or, more likely, investors know they have a good investment in Autonomy and want to hold out for a better offer or if other companies are likely to bid for Autonomy.

It is understood that Microsoft and Oracle were considering buying Autonomy last year.

HP has offered an agreed 2,550 pence per Autonomy share, which values the software company at stg£7.09bn (US$11.2bn), representing a 79pc premium equivalent to 10 times annual sales.

Cambridge-based and London Stock Exchange-listed Autonomy develops infrastructure technology that has been adopted by enterprises to process information across all internal and external data sources and counts customers such as US federal government agencies, Cisco Systems, the US Library of Commerce, ABN Amro, Forbes, Johnson & Johnson and Banco de Espana.

In 2007, Autonomy acquired Belfast-based enterprise software company Meridio for US$40.8m.

Carrick-on-Suir native Lynch set up Autonomy in 1996 as a spin-off from his first company, Cambridge Neurodynamics, which began with a personal loan. In 2006, the company turned in revenues of US$250m for the year. At one point in Autonomy’s history, the company had a market capitalisation of stg£8bn.

Lynch recently listed in WIRED magazine Europe’s 100 most influential players in digital business.

In May, Autonomy revealed it was to buy certain assets of Iron Mountain for US$380m.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years