As HP takes a massive charge for its $11.1 billion purchase of software company Autonomy a year ago, Oracle gets to say “We told you so.”Last year, Oracle published a blistering set of documents directly contradicting Autonomy CEO Mike Lynch’s claim that he hadn’t tried to sell his company to Oracle.
HP said this morning that it’s taking an $8.8 billion writedown, largely due to alleged accounting fraud at Autonomy.
The two companies, once friendly, now spar viciously and compete directly in the high-end computer hardware business.
In late September 2011, a month after HP’s then-CEO, Léo Apotheker, completed the Autonomy deal, Oracle CEO Larry Ellison said Lynch had tried to sell Autonomy to Oracle in a conference call with analysts. Lynch denied Ellison’s claim.
Oracle turned around and published the slide deck that it said Mike Lynch had presented when he visited Oracle and offered to sell his company. Oracle says it wasn’t interested in Autonomy “because Autonomy’s current market value of $6 billion was way too high.”
In one press release the company said:
Mike Lynch, Autonomy CEO, then publicly denied that his company had been shopped to Oracle. Specifically, Mr. Lynch said, “If some bank happened to come with us on a list, that is nothing to do with us.” Mr. Lynch then accused of Oracle of being “inaccurate.” Either Mr. Lynch has a very poor memory or he’s lying.
Autonomy’s slides that are still hosted for public viewing on Oracle’s site. Oracle never expressed concern about the validity of the numbers or Autonomy’s accounting—just the company’s valuation. But Oracle’s statements about Lynch certainly appear in a new light.
Lynch has denied HP’s allegations as “false.”
Oracle declined fresh comment to the situation, but here is Oracle’s press release from 2011:
Another Whopper from Autonomy CEO Mike Lynch
REDWOOD SHORES, Calif., September 28, 2011Oracle issued the following statement:
“Autonomy CEO Mike Lynch continues to insist that Autonomy was never ‘shopped’ to Oracle. But now at least he remembers and admits to meeting with Oracle President Mark Hurd and Doug Kehring, Oracle’s head of M&A, this past April. But CEO Lynch insists that it was a purely technical meeting, limited to a ‘lively discussion of database technologies.’ Interesting, but not true. The slides Lynch showed Oracle’s Mark Hurd and Doug Kehring were all about Autonomy’s financial results, Autonomy’s stock price history, Autonomy’s Price/Earnings history and Autonomy’s stock market valuation. Ably assisting Mike Lynch’s attempt to sell Autonomy to Oracle was Silicon Valley’s most famous shopper/seller of companies, the legendary investment banker Frank Quattrone. After the sales pitch was over, Oracle refused to make an offer because Autonomy’s current market value of $6 billion was way too high.
We have put Mike Lynch’s PowerPoint slide sales-pitch up on the Oracle website – Oracle.com/PleaseBuyAutonomy – with the hope Mike Lynch will recognise his slides, his memory will be restored, and he will recall what he and Frank Quattrone discussed during their visit to Oracle last April. Yesterday, the Autonomy CEO did not remember having any meeting with Oracle. Today, he remembers the April meeting and inaccurately describes how it came about and what was discussed (see next paragraph). Tomorrow, he will need to explain his slides.
Mike Lynch describes his meeting with Oracle: “On one of my trips to SF (April 2011), Frank Quattrone whom I have known for a long time offered to introduce me to Mark hurd. Oracle was a customer and I have never met him, so it was a good opportunity. Frank does this from time to time on my visits, he has introduced me to many people. . NOTE: Frank was not engaged by Autonomy and there was no process running. The company was not for sale. I recall meeting with mark and someone else I believe called Doug. At the start of the meeting they joked that frank was there to sell them something. Frank and I made it clear that was not the case. We then met and had a lively discussion about database technologies. The meeting lasted approximately 30 mins. Frank is happy to confirm this.”
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