Friday, August 19, 2011

HP Shares Decrease On Autonomy Bid

Shares in Hewlett-Packard have depressed neatly on headlines that it is shopping UK program definite Autonomy and might sell its Personal Computer business.

HP's future skeleton moreover add no longer selling smartphones and inscription computers and refocusing on selling software.

HP shares fell 20% in Friday trade to shut at $23.58.

HP's 7.1bn ($11.7bn) offer for Autonomy, agreed by Autonomy's board, is 64% on top of the firm's marketplace value.

HP's Personal Computer business is the world's largest, but by the finish of next year, HP computers could be sole beneath other company's name.

Analysts say the pierce underscores Apple's prevalence in smartphones and tablets with its iPhone and iPad products.

"Apple single-handedly knocked HP out of the PC, smartphone and inscription business," mentioned Gleacher Co researcher Brian Marshall.

The new plan means that HP, that will go on to sell servers and other apparatus to business customers, will follow the trail taken by IBM in 2005, sidelining Personal Computer hardware in foster of more essential program and services.

Analyst Milan Radia at Jefferies mentioned the treat gave HP an "exceptionally burly starting point" in the craving program market.

"Today, program accounts for usually about 2% of HP's revenue," he said. "By way of comparison, IBM's program tour usually commenced in 2001 with a $1bn acquisition, followed by a array of leading transactions."

Autonomy was set up by researchers at Cambridge University and specialises in pattern-recognition technologies.

HP will pay 2,550 pence per share, compared with a shutting cost in London on Wednesday of 1,558p.

The pragmatic gratefulness of the company is homogeneous to 47 times the pre-tax increase warranted by Autonomy in the 12 months to June this year.

Meanwhile, on Thursday, HP voiced quarterly results that were mostly in line with expectations, with revenues of $31.2bn (18.9bn), up 1.6% from a year earlier.

HP embellished its limit full-year predict from $130bn to $127.6bn, echoing a identical shrinking by Dell on Tuesday.

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