Bloomberg News

Oracle Posts PowerPoint Slides to Counter Autonomy CEO’s Claims

September 29, 2011

Sept. 29 (Bloomberg) -- The dispute over Oracle Corp.’s claim that it was offered Autonomy Corp. before the company’s acquisition by Hewlett-Packard Co. could have gone down as a he- said/he-said account, except for those PowerPoint slides.

Oracle posted a 14-page presentation by Frank Quattrone’s Qatalyst Partners LLC to prove it was offered a chance to buy Autonomy before Hewlett-Packard made its deal. Autonomy Chief Executive Officer Michael Lynch has denied that his Cambridge, England-based company was shopped to Oracle.

“Either Mr. Lynch has a very poor memory or he’s lying,” Redwood City, California-based Oracle said yesterday in a statement that concluded, “The Lynch shopping visit to Oracle is easy to verify. We still have his PowerPoint slides.”

The back-and-forth reflects the growing tension between Oracle and Hewlett-Packard, onetime allies that now compete in computer servers. The feud intensified in 2010 when Hewlett- Packard ousted CEO Mark Hurd, a friend of Oracle CEO Larry Ellison. A month later, Hurd joined Oracle as president.

Autonomy became a source of contention after Aug. 18, when Hewlett-Packard said it was buying the software maker for $10.3 billion, at a 64 percent premium. Investors’ concern that Hewlett-Packard overpaid contributed to the board’s decision last week to replace CEO Leo Apotheker with Meg Whitman, people familiar with the matter have said.

‘Absurdly High’

Ellison emphasized the price on a Sept. 20 conference call with analysts, saying Autonomy had solicited interest from Oracle before the Hewlett-Packard deal.

“Autonomy was shopped to us,” he said. “We looked at the price and thought it was absurdly high.”

Lynch on Sept. 23 denied that he’d offered the company to Oracle, saying he preferred Hewlett-Packard because the company “doesn’t have a legacy position it has to protect.”

In a Wall Street Journal article published this week, Lynch called Ellison’s remarks “inaccurate.”

Oracle responded yesterday, saying Lynch met with Oracle, alongside investment banker Quattrone.

In a January e-mail sent from Quattrone to Hurd, obtained by Bloomberg News, the banker touted the value of Autonomy.

“It’s a very strategic asset that could alter the balance of power in the industry for whoever might acquire it,” he said. Quattrone didn’t respond to a request for comment.

About two months later, at a meeting attended by Hurd and Senior Vice President Douglas Kehring, Lynch and Quattrone made their pitch, Oracle said. The men were told that with a current market value of $6 billion, Autonomy was already “extremely overpriced,” Oracle said.

Lynch responded to that depiction of the meeting by saying it was held because Oracle is an Autonomy customer.

“In April there was a 30-40 minute meeting between Autonomy and Mark Hurd, which was set up by Frank Quattrone as an introduction to Mark Hurd,” Lynch said in an e-mailed statement. “In the meeting, in response to a joke about Mr. Quattrone’s presence, it was made clear Autonomy was not for sale and there was no process under way. Mr. Quattrone’s company was not engaged by Autonomy at that time. There has been no other contact with Oracle since then.”

--With assistance by Jonathan Browning in London. Editors: Nick Turner, Tom Giles

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; Vivek Shankar in San Francisco at vshankar3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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