NEW YORK (TheStreet) -- Shares of Hewlett-Packard (HPQ) are dropping by 0.12% to $32.65 after the company today agreed to pay $100 million to its investors to settle claims that they were misled about the $10 billion acquisition of British software maker Autonomy.
HP acquired Autonomy in 2011 but was forced to write down its value by $8.8 billion only a year later. HP said at the time of the write-down that it had been duped into overpaying for the acquisition. Shortly after, investors saw the values of their shares tumble, Reuters reported.
Leading the class-action lawsuit is PGGM, a Dutch pension fund manager who alleged that HP made "materially false statements and omissions" about the price it paid for Autonomy, according to The Financial Times.
"We hope this victory will set a precedent and make companies think again before they make statements that are not supported by facts," legal counsel Femke Hendriks at PGGM stated.
Even though HP believes the lawsuit has no merit, "it is desirable and beneficial to HP and its shareholders to settle the case as further litigation would be burdensome and protracted," Hewlett-Packard said in a statement.
Separately, TheStreet Ratings team rates HEWLETT-PACKARD CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HEWLETT-PACKARD CO (HPQ) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income."