HP realised it had paid over-the-odds for Autonomy in 2011, sparking high-level arguments as some execs tried to back out of the acquisition, according to a new court filing.
Hewlett-Packard bought the British software maker for 7 billion in 2011, before writing down 5.6 billion sparking the ire of shareholders, who launched a class action lawsuit against the tech giant.
The lawsuit was settled by HP for $100 million in June this year, but fresh legal documents filed in a Californian district court at the end of August reveal HP harboured doubts over the acquisition before it went through.
Writing shortly before the purchase, HP's chairman, Raymond Lane, said: "I am still haunted by Autonomy. I don't think it is the panacea we think it is."
But in reply, then-CEO Leo Apotheker claimed the deal was irreversible which it likely would have been under English law adding: "Autonomy, as well as the additional organic steps we are undertaking, will allow HP to reshape itself as a company generating 8-9 per cent of its revenues from software, with a better growth and margin profile."
Shareholders also wrote angry emails demanding the deal be reneged on, with David Hoeft of Dodge and Cox writing: "Scuttle the Autonomy deal, repurpose the cash for repo [a repurchase agreement].
"Huge breakup fee would be a very small price to pay for extrication."
The filings also claim that analysts warned against buying Autonomy, saying its technology had been surpassed by others', rendering it overvalued, but the board voted the acquisition through anyway.
The revelations come as HP sues Autonomy's then-CEO Mike Lynch, and ex-CFO Sushovan Hussain for 3.3 billion, claiming they cooked the books to inflate the takeover target's value.
Both deny the claim, and Lynch plans to counter-sue HP for at least 100 million.
The Serious Fraud Office dropped its investigation into the acquisition in January this year, citing a lack of evidence, after HP referred the deal to the body in 2013.
