Original URL: http://www.theregister.co.uk/2013/01/02/hp_sales_and_spinouts/

HP itching to flog flaccid biz units: Are Autonomy, PSG in firing line?

Titan wants cash for dead men walking

By Gavin Clarke

Posted in Financial News, 2nd January 2013 13:58 GMT

Hewlett-Packard is considering selling or spinning out its weak business units but warned investors that any deals may not go smoothly.

The troubled tech titan stated in its latest paperwork filed to US financial regulator the SEC: “We continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives."

HP’s management warned that flogging off bits and pieces may take longer than desired, and the spurned units may not sell for their asking price. HP also noted it may not be able to completely unload all its unwanted businesses units, and could end up an equity owner or underwriter.

You can read the full 10-K filing here [PDF].

The statement comes little more than a year after HP’s incoming chief executive Meg Whitman reversed her predecessor Leo Apotheker's decision to flog the PC-making side of the company. In August 2011 Apotheker said he was looking to spin out HP’s Personal Systems Group (PSG) and was fired by the HP board a month later. After Whitman arrived following his departure, she insisted in October that year that HP was committed to keeping PSG.

“It’s clear after our analysis that keeping the Personal Systems Group within HP is right for customers and partners, right for shareholders, and right for employees," she said at the time.

During HP’s most recently reported quarter, PSG revenue was down 14 per cent year on year; the unit's business and consumer sales were down 13 per cent and 16 per cent respectively.

The 10-K document could also spell trouble for Autonomy, the UK search software company bought by HP during Apotheker's reign for $11.7bn in 2011. After suggesting hiving off PSG, Apotheker pitched the Autonomy deal as a bold move designed to position HP for new markets.

Late last year, however, HP alleged Autonomy had overstated its value and claimed the small biz indulged in accounting irregularities prior to its acquisition. This led to HP reporting an $8.8bn loss in Q4 2012 and the titan referred the matter to the financial authorities in the US. Autonomy’s founder and former CEO Mike Lynch, who negotiated the deal with Apotheker, has strenuously denied HP’s accusations.

With Autonomy champion Apotheker gone, though, and HP threatening to eject unwanted teams, Autonomy’s future at the centre of HP may be promising despite Whitman's claims to the contrary. ®