The resignation of Hewlett Packard [HPQ US] Chief Executive Leo Apotheker and wider market turmoil should have little impact on the closure of the US group’s USD 10.2bn cash bid for Autonomy [AU LN], said sources familiar with the situation. Shares in Autonomy have slipped slightly to GBP 25.20 in the past two days on the back of changes at HP and wider macro economic fears.

Autonomy earlier this week sought legal advice on the consequences that an overhaul of HP’s top management would have on the deal, according to two sources familiar with the situation. Lawyers went through the deal agreement and reassured Autonomy that it was very secure particularly with regard to material adverse change clauses, said one of the sources.

It is noted that as part of the agreement HP has undertaken not to lapse the deal if it does not reach its 75% shareholder acceptances condition – which can be lowered to 50% plus one – before Day 60 of the offer period. In theory, without this clause HP could walk from the deal at any tender deadline if the acceptance condition is not met.

Reports yesterday, Thursday, said that despite the departure of Apotheker, who was the main driver behind the Autonomy deal, HP has no intention of attempting to get out of the deal. One of the first two sources said HP must now stick to its strategy to spin off or sell the PC business to keep its financing bank and the executives at Autonomy firmly behind the company’s overall plan [as outlined under Apotheker].

A fourth source said any legal advice sought by Autonomy was likely simply a case of a responsible board ensuring it has covered itself for all eventualities. The source added there are no deal conditions with regards to financing that would be breached should HP change strategy or decide to retain its PC business.

On 13 September HP said it had secured 41.62% of Autonomy and extended the first offer deadline until 3 October. The tender period for HP’s GBP 25.50 a share recommended cash offer began on 22 August.

According to regulatory filings, merger arbitrage hedge funds today hold more than 30% of Autonomy. These funds have been reluctant to tender their holdings as they thought Hewlett Packard’s offer, as opposed to scheme of arrangement, and quick notification of regulators following the deal announcement last month, suggested it intended to acquire shares in the market.

Tendering into the “sweep” would have resulted in a quicker pay day for the funds than if they had tendered into the formal offer, explained one hedge fund manager involved in the situation. “It doesn’t look like the sweep is now going to happen so I expect the remaining funds will instruct their prime brokers a few days ahead of the deadline to tender their positions into the offer,” said the fund manager.

It is understood, however, that once HP declares the deal unconditional as to acceptances, which it can do with between 50% and 75%, it will then have only 21 days to satisfy the antitrust conditions.

HP’s GBP 25.50 a share recommended cash bid for Autonomy remains conditional on 75% shareholder acceptances and antitrust clearances from the German Bundeskartellamt (BKartA) and the Austrian Federal Competition Authority (BWB). The deal has already gained clearances from US and Irish competition authorities.

It is understood that BKartA will make its decision on Monday 26 September and that it currently expects to clear the deal.

Some Autonomy investors today expressed mild alarm after an announcement appeared on the BWB’s website indicating it could extend its investigation. However, both Hewlett Packard, Autonomy and other sources who have spoken to the Austrian authority believe the matter is merely a procedural issue.

The BWB’s website states the FCA’s application for Phase II proceedings was filed “for safeguard reasons”. They [the BWB] have tried to be clear that this is a procedural matter and likely relates to a slight delay in their receiving information on the merger, it was said. There is no reason to believe the case will go to a Phase II investigation, it was added.

A spokesperson for the BWB said: “The FCA’s application for Phase II proceedings are indeed a normal formality. We have not yet received all the information we requested but the likelihood is that we will next week and will then authorize the deal to go ahead.”

Sources familiar with the deal said it would close even in the highly unlikely event Autonomy’s directors rescinded their recommendation following the changes at HP. This is effectively a cash offer to Autonomy’s shareholders with a recommendation on top, said one source. “In this market why would shareholders suddenly refuse a cash offer?”

It is noted that Autonomy’s directors have given irrevocable undertakings to accept the offer in respect of their combined 9.12% holding in the company.