PALO ALTO, Calif. – Hewlett Packard Co. (HPQ) is paying $4.5 billion to buy Mercury Interactive Corp., a maker of business management software that has been entangled in a stock options scandal for the past nine months.
The Palo Alto, Calif.-based computer and printer maker said it is paying $52 per share in cash for Mountain View, Calif.-based Mercury. That represented a 33 percent above Mercury's closing price of $39 in the over-the-counter market.
Mercury has been in turmoil since the company ousted its longtime chief executive and several other top managers last November after concluding they rigged stock option awards to increase their potential windfalls.
As it investigated the problems caused by the alleged manipulation, Mercury wasn't able to meet regulatory deadlines for reporting its financial results -- a delay that caused its shares to be de-listed from the Nasdaq Stock Market.
Earlier this month, Mercury wiped out $525 million in previously reported profits to correct the accounting problems caused by the stock option imbroglio.