H.P. Paid $81 Million For Lots Of Bad Advice From Bankers

Bankers at lunch

Hewlett-Packard paid out $81 million in fees to investment bankers over the past two years.

Andrew Ross Sorkin, who dug up this nugget, says that money bought HP a whole lot of bad advice.

He says its a mistake that these bankers have “so far escaped scrutiny.”

Sorkin:

Take H.P.’s $11.7 billion acquisition of Autonomy this year, for example. H.P. paid an astonishing 80 per cent premium for Autonomy, a business software maker based in Britain. H.P. lost $12 billion in market value within 24 hours of the deal’s being announced. Inexplicably, H.P. disclosed the transaction on the same day that it lowered its earnings guidance, creating a huge loss of confidence in the company among analysts and investors.

Sorkin also says HP looks like it got played by bankers when it bought Palm.

In defence of bankers, the advice executives at a company like HP pay them to get is HOW to do the transaction.

Sure, bankers will also show up with all kinds of deal books, but the first thing you learn in CEO school is to ignore all that.

CEOs have to take responsibility for the bad decisions they make.

Former HP CEOs Leo Apotheker and Mark Hurd certainly have (whether they wanted to or not).

Go read Sorkin’s whole column >>

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