Friday, September 03, 2010

Last man standing: Who will buy Autonomy?

According to a FT report, Autonomy, the listed, UK-based enterprise software company was the subject of renewed bid speculation. The article added that US-based rivals Oracle and Microsoft were again mentioned as potential bidders for Autonomy GBP 25 a share but did not cite sources for the rumour. In my mind neither one would be the best fit. SAP, EMC, HP and even Dell could look at Autnomy. Neither Microsoft or Oracle likes to get into contested deals.

Market reports in The Daily Telegraph and The Independent also noted the rumours regarding Autonomy. The Daily Telegraph item citing dealers who believe Autonomy might soon receive an offer at 2200p per share. Neither report cited sources. Autonomy’s share price closed 4.6% up at 1631p on the London market yesterday, valuing the group at GBP 3.94 billion (EUR 4.75 billion).

There has been a massive consoldation in the Enterprise Content Management industry in the last 4 years. Autonomy and Open text are the two remaining publicly listed large ECM players that are looking for buyers. Last month, FT reported that Auonomy might be preparing to bid for Open Text but it has not materialized yet.  Both firms have historically relied upon tuck-in acqusitions to grow but they ran out of candidates to buy. It will become increasingly difficult to satisfy shareholder expectations of profitable growth for  both companies where oeprational excellence and organic growth wil be challenging for existing management. As Buffe said, when the tide goes down, everyone sees the rocks.....
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