HP’s doomed acquisition of software maker Autonomy is costing another $100 million, as the PC maker says it has reached a settlement in class-action litigation stemming from the 2011 deal.
The payout, directed toward the action’s lead plaintiff PGGM Vermogensbeheer, is HP’s way of satisfying shareholders who feel they got burned by the $8.8 billion write-down the company had to swallow following the acquisition debacle.
HP said although it believes the action was without merit, “it is desirable and beneficial to HP and its shareholders to resolve the case as further litigation would be burdensome and protracted.”
Under the terms of the deal, the $100 million will go into a settlement fund used to compensate HP shareholders who purchased company stock between August 19, 2011 and November 20, 2012.
What’s more, the settlement ensures that any current and former HP officers, directors, and advisors are cleared from any future Autonomy-related securities claims. Initially, shareholders were seeking the freedom to pursue damages claims against HP executives responsible for the deal.
HP has consistently blamed Autonomy for the failed acquisition and the subsequent impairment charge, claiming Autonomy’s financial statements were riddled with “accounting improprieties, disclosure failures and outright misrepresentations”.
Mike Lynch, founder of Autonomy and CEO of the company at the time of the sale, hasrepeatedly denied the accusations and claimed his company was routinely audited. Leo Apotheker, who was the CEO of HP at the time of the acquisition, claimed his own due diligence around the purchase was “meticulous“.
An investigation by the UK’s Serious Fraud Office was dropped earlier this year.
ZDNET