Hewlett-Packard’s ill-fated $10-billion acquisition of British software maker Autonomy Corp. is going to cost it even more money after it recently decided to settle a class-action lawsuit tied to the deal.
The class action was brought on behalf of investors who were hurt after the company acquired Autonomy for $10 billion before writing down $8.8 billion related to the deal a year later. HP had said at the time of the write-down that it had been duped into overpaying for the acquisition. The $10-billion price tag was 11 times greater than Autonomy’s annual revenue of $870 million.
The Palo Alto, Calif., company announced Tuesday that it will pay $100 million into a settlement fund that will go to shareholders who bought HP shares between Aug. 19, 2011 and Nov. 20, 2012.
The company said in a statement that even though it believes the lawsuit has no merit, "it is desirable and beneficial to H-P and its shareholders to settle the case as further litigation would be burdensome and protracted.”
The company and its current and former executives and directors will be released from any Autonomy-related securities claims as part of the deal.