Was Autonomy Shopped To Oracle? Depends On Whom You Believe

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Oracle and software developer Autonomy, which HP is in the process of acquiring for $10.3 billion, are engaged in a war of words over whether Autonomy tried to get Oracle to buy it earlier this year.

The dispute, including an Oracle press release accusing Autonomy CEO Mike Lynch of having "a very poor memory" or "lying," is the latest episode in the falling out between once-allies Oracle and Hewlett-Packard.

Since Oracle acquired Sun Microsystems in January 2010 Oracle has been competing more directly with HP in computer hardware. And Mark Hurd joined Oracle as president last year after HP dismissed him as CEO. The two companies also have sparred in court over several issues, including Oracle's decision to halt development of its software products for the Itanium processor that HP uses in its Integrity line of servers.

The latest dustup began when Oracle CEO Larry Ellison, speaking on a conference call with financial analysts on Sept. 20, said Autonomy, a Cambridge, U.K.-based developer of information management and infrastructure software, had pitched itself to Oracle as a potential acquisition, but Oracle wasn't interested because of Autonomy's price tag.

"Autonomy was shopped to us," Ellison said during the call to discuss Oracle's first-quarter results. "We looked at the price and thought it was absurdly high. We had no interest in making the Autonomy acquisition."

Ellison, on the call, also had said that Oracle's flagship database was capable of handling unstructured data such as text – a key selling point of Autonomy's software – and that Oracle didn't need to acquire another database product.

Ellison was commenting on HP's Aug. 18 announcement that it will acquire Autonomy, for $10.3 billion. HP said it expects to complete the buyout, the company's largest software acquisitions and one of its largest acquisitions ever, by the end of the year.

That prompted a response from Autonomy CEO Mike Lynch who, in a Wall Street Journal article published Tuesday, called Ellison's remarks "just inaccurate" and denied that Autonomy had been shopped to Oracle.

Late Wednesday, just before 7:30 p.m. EST, Oracle issued a statement describing how Lynch and investment banker Frank Quattrone met with Oracle president Mark Hurd and Douglas Kehring, head of M&A at Oracle, on April 1.

"After listening to Mr. Lynch's PowerPoint slide sales pitch to sell Autonomy to Oracle, Mr. Kehring and Mr. Hurd told Mr. Lynch that with a current market value of $6 billion, Autonomy was already extremely over-priced. The Lynch shopping visit to Oracle is easy to verify. We still have his PowerPoint slides," the statement said.

Oracle has even posted the PowerPoint slides on its web site.


Next: Oracle Accuses Autonomy CEO Of Telling A "Whopper"

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