HP’s chief financial officer Cathie Lesjak blindsided her old boss at a board meeting and told assembled directors she was totally opposed to HP’s $11 billion acquisition of enterprise search company Autonomy.Fortune reports that Lesjak had told then-CEO Leo Apotheker in private that she was opposed to the deal, thinking it was too expensive.
Apotheker had proposed paying 11x revenues for Autonomy, when comparable companies were priced at around 3x.
But Apotheker was surprised when she countered him at the board meeting. According to Fortune, citing somebody at the board meeting, Lesjak said:
I don’t think it’s a good idea. I don’t think we’re ready. I think it’s too expensive. I’m putting a line down. This is not in the best interests of the company.
HP went through with the deal anyway.
But the conflict was just one of many examples of how Apotheker lost control over the complicated political landscape at HP, and he was ousted less than two months later.
The thing is, the conventional wisdom in Silicon Valley says that Lesjak was probably right.
One CEO of an enterprise company that does not compete with HP told us that he thought the valuation was completely insane, and grounds for firing Apotheker even without all his other slip-ups. Some HP partners have also criticised the deal, and Oracle said they passed on the deal at $6 billion because it was too expensive.