HP Buys Zynga for $5 Billion
HP reentered theÂ acquisitionÂ fray today with a $5 billion purchase of social gaming titan Zynga. TheÂ surpriseÂ move comes just one day after taking an $8 billionÂ write-downÂ on its previous $10 billion acquisitionÂ of enterprise software concern Autonomy. HP is offering Zynga's existing shareholders an all cash deal at $6.32 a share, which Â representsÂ a 280% premium over its closing price yesterday.Â  In a statement to shareholders HP CEO Meg Whitman said the deal was 'a perfectÂ strategicÂ fit': "HP strongly believes that success in consumer printing depends on maintaining a strongÂ identityÂ as a consumer-focused company. Today'sÂ purchase of Zynga solidifies HP as a consumer brand and allows us to exploit natural synergies between smartphone games and printers." The move comes as a surprise to analysts, who doubt the strategic logic of the deal and point to Zynga's failing business model and poor accountingÂ practices. Whitman admits the difficultiesÂ surrounding her new pet project, but remains undeterred: "We think half their revenues are probably fraudulent, but we like the other half. That's the half we're paying for."