Report: Suitors Circling Around HP's Autonomy, EDS Businesses


Hewlett-Packard has been contacted by U.S. technology companies interested in acquiring its Autonomy and EDS businesses, The Wall Street Journal reported Wednesday, citing people familiar with the discussions.

In HP's 10-K filing last month, the company said it would "continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives." The fact that this language wasn't in last year's 10-K, a nuance first reported by Bloomberg, triggered speculation that HP might be looking to streamline its operations by selling off underperforming businesses.

[Related: HP Says It May Sell Underperforming Assets, Business Units]

HP could not be reached for comment. But there are varying interpretations about whether this is a big deal or not.

Apparently, it's not unusual for HP to be approached by suitors in such a fashion. HP's 10-K filing, and reports that Dell is considering a private equity buyout, have served to amplify the frequency of these inquiries as of late, according to a follow-up report from All Things Digital.

"We get incoming on this sort of thing almost every day. We may even take some calls or meetings, but every time the answer is the same: No," an anonymous source familiar with the situation told All Things Digital.

CRN reported last September that HP had out feelers to potential EDS buyers, including private equity firms, but nothing materialized from those talks.

Brian Alexander, director of technology research at Raymond James & Associates, estimated at the time that HP could get around $5 billion for EDS, which is believed to have around 110,000 employees.

HP acquired Autonomy for $11.1 billion in 2011 and paid $13.9 billion for EDS in 2008, and last year wrote down nearly $17 billion from the two acquisitions.

HP CEO Meg Whitman says her turnaround plan hinges on keeping HP's businesses in-house. Her first big move as CEO was to reject the idea of spinning off or selling HP's PC business. Yet pressure for an HP breakup is mounting on Wall Street, with several analysts claiming HP would be worth significantly more if broken up into consumer and enterprise units.

PUBLISHED JAN. 17, 2013