The Oracle HP bloodbath continues with Oracle going after HP’s new jewel Autonomy.
Autonomy said they were not shopping themselves to Oracle. Then Oracle came out with what they claim is a smoking gun in the form of Qatalyst founder Frank Quatronne’s slide decks laying out the companies financials and business fundamentals.
Autonomy then denied it claiming Qatalyst was not authorized or even retained by Autonomy.
Oracle definitely look like fools in this exchange. They took sales material from Qatalyst and presented as the smoking gun that Autonomy was shopping itself. Technically speaking Oracle loses this battle for creating the perception that a 30 min meeting was a M&A pitch.
The reality is Autonomy was shopping itself to test the market. Frank Quatronne is known for putting the companies he sells through a “auction”. That means Frank has to “gin up” interest fast. That is what was happening here. It’s all optics most likely to get HP to think Oracle was in the running aka “a stalking horse”. The presentation was a “trial balloon” via an arms length party “the investment banker”. To think that Autonomy didn’t know what was happening is a stretch.
Here is the blow by blow…
“Autonomy CEO Mike Lynch continues to insist that Autonomy was never ‘shopped’ to Oracle. But now at least he remembers and admits to meeting with Oracle President Mark Hurd and Doug Kehring, Oracle’s head of M&A, this past April. But CEO Lynch insists that it was a purely technical meeting, limited to a ‘lively discussion of database technologies.’ Interesting, but not true. The slides Lynch showed Oracle’s Mark Hurd and Doug Kehring were all about Autonomy’s financial results, Autonomy’s stock price history, Autonomy’s Price/Earnings history and Autonomy’s stock market valuation. Ably assisting Mike Lynch’s attempt to sell Autonomy to Oracle was Silicon Valley’s most famous shopper/seller of companies, the legendary investment banker Frank Quattrone. After the sales pitch was over, Oracle refused to make an offer because Autonomy’s current market value of $6 billion was way too high.
We have put Mike Lynch’s PowerPoint slide sales-pitch up on the Oracle website – Oracle.com/PleaseBuyAutonomy – with the hope Mike Lynch will recognize his slides, his memory will be restored, and he will recall what he and Frank Quattrone discussed during their visit to Oracle last April. Yesterday, the Autonomy CEO did not remember having any meeting with Oracle. Today, he remembers the April meeting and inaccurately describes how it came about and what was discussed (see next paragraph). Tomorrow, he will need to explain his slides.
Mike Lynch describes his meeting with Oracle: “On one of my trips to SF (April 2011), Frank Quattrone whom I have known for a long time offered to introduce me to Mark hurd. Oracle was a customer and I have never met him, so it was a good opportunity. Frank does this from time to time on my visits, he has introduced me to many people. . NOTE: Frank was not engaged by Autonomy and there was no process running. The company was not for sale. I recall meeting with mark and someone else I believe called Doug. At the start of the meeting they joked that frank was there to sell them something. Frank and I made it clear that was not the case. We then met and had a lively discussion about database technologies. The meeting lasted approximately 30 mins. Frank is happy to confirm this.”
“Last week in response to a question about unstructured information Oracle made some less-than-enlightened comments on the subject, which Autonomy has been pointing out in the press.
Now, as an attempt at diversion from their poor positioning, Oracle has raised the issue of whether Autonomy was “shopped by its management team” to them.
In April 2011, there was a meeting for approximately thirty or forty minutes between Autonomy and Mark Hurd, which was set up by Frank Quattrone as an introduction to Mark Hurd. Oracle is an Autonomy customer. It was made clear that Autonomy was not for sale and no sale process was under way. Mr. Quattrone’s company was not engaged by Autonomy at that time. There has been no other contact with Oracle since then.
It may well be that investment banks were independently recommending Autonomy as an acquisition target to industry players – that is standard practice for — but this would not have been at our behest. Qatalyst have informed us that the slides Oracle has recently posted on its website were prepared and sent independently by Qatalyst to Oracle on 26 January (the content is clearly from January). This is the first time we have seen them. Autonomy was not involved in this nor was Qatalyst engaged by Autonomy until mid-year. Autonomy did not present these slides in the meeting.
Oracle seems a little confused about the sequence of events and origins of the data it has received, something that would suggests it needs better management of and insight into the unstructured data on its internal systems. We would be delighted to help.”