HP to spin off PC business, buy Autonomy

Hewlett-Packard is allegedly looking to spin off its personal computer business as part of a new concentration on software and enterprise offerings which inludes a deal to buy Autonomy for $10 million.

Autonomy, the second largest software outfit in the UK, has confirmed that it is talking to HP - although hasn't gone so far as to detail exactly what it's talking about - with the US company expected to buy it to get hold of its enterprise database know-how.

Sources close to the deal speaking to Bloomberg have claimed that Hewlett-Packard will be streamlining as part of the deal and spinning off its consumer and personal computer businesses as a separate company - with industry wags suggesting that it calls the company Compaq in honour of the company it absorbed back in 2002.

Industry analysts have welcome the rumour, which is HP is currently keeping quiet about ahead of an expected official announcement later tonight. With HP due to give its quarterly earnings call when US markets close, it would be a good time to announce the deal.

Thus far, Autonomy's shares on the US markets have shot up 51 per cent on rumours of the deal, following an 8.3 per cent drop in UK trading before the takeover rumours started. HP's stock, by reflection, has thus far dropped $1.23 on the news.

An HP PC subsidiary - whether it would be called Compaq or something else - would likely take with it the company's other consumer electronics projects, including palmtops, smartphones, and tablets.

An HP spokesperson was unavailable to comment on the rumour at the time of writing.

UPDATE 2104:

HP has issued a statement confirming that it's talking to Autonomy, and that it is investigating the possibility of a spin-off of its PC business. "HP also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG)," a statement from the company reads. "HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction."

In a surprise move, HP also announced that it is to kill off webOS, the well-regarded operating system it acquired in its purchase of Palm and that forms the heart of its smartphone and tablet offerings. "HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward."

The full statement can be found here.