HP to Meet UK Lawmakers Over Autonomy Deal
Executives from Hewlett-Packard will meet UK Business Secretary Vince Cable next week to discuss the 7.1 billion pounds ($11.7 billion) takeover of Autonomy, one of the UK's biggest software companies.
The meeting follows the controversy in the UK surrounding Kraft's takeover of Cadbury last year.
Cable, who has been one of the most outspoken critics of Kraft, spoke to Mike Lynch, founder and chief executive of Autonomy, Friday and received assurances that HP is committed to UK and Autonomy's Cambridge base, a source told CNBC.com.
HP's share price plunged Friday following the announcement of the recommended deal, which offered a 78 percent on Thursday's closing price, Friday morning. Autonomy was by far the biggest riser in the FTSE 100 index Friday.
Food giant Kraft was criticized in Parliament after mounting a hostile takeover of the much-loved British chocolate and candy maker.
Disapproval centered on Kraft's promise to keep Cadbury's Somerdale factory near Bristol open. The closure of Somerdale was announced soon after Kraft took over.
Kraft has since announced plans to spin off its snacks division, including Cadbury.
Autonomy has recently taken on Brunswick, the PR firm who acted for Kraft during the Cadbury deal, but is using its previous representatives Financial Dynamics for the duration of the deal.
Executive Chairman Irene Rosenfeld also turned down repeated requests to appear before an influential committee of MPs, sending her executive vice-president Marc Firestone instead.
The takeover even led to talk of a "Cadbury law" making it more difficult for foreign companies to take over British companies has also been mooted.
Cable has been at the forefront of a subsequent investigation into "short-termism" and shareholder behavior in the City, London's financial center.
A spokesperson for Cable declined to comment.
While Autonomy, which makes software to search data such as e-mails, documents and voice calls, does not excite as strong emotions in the British as Cadbury, it is still widely viewed as one of the UK technology sector's big success stories over the past decade.
Founded by Irish-born, Cambridge-educated Lynch in 1996, Autonomy has grown to become part of the FTSE 100 index. Lynch, who plans to stay on after the takeover, will pocket close to 500 million pounds from the deal.
HP plans to spin off its computer division, including Autonomy, to focus on more lucrative software and IT services work.