Hewlett-Packard agrees deal to buy Autonomy for £7.1bn

The offer, which has been accepted by Autonomy's board, is 64% above the firm's market value.

It came as the US company announced a massive strategic shake-up, involving stopping making hardware in order to refocus on software.

Shares in HP spiked as rumours of the various news - now confirmed by HP - broke, but the firm eventually ended the day down 7.6%.

That came on top of a 3.9% fall on Tuesday that was prompted by a warning from rival Dell that it expected demand in the US market to weaken in the coming months.

'Positive for UK'

Autonomy was set up by researchers at Cambridge University and specialises in pattern-recognition technologies.

Founder Mike Lynch, whose 8.2% stake could be worth several hundred million dollars, has pledged to vote for the deal, told the BBC: "HP understands the special culture we have. This is about building Autonomy. It will be a positive thing for Cambridge and the UK."

HP will pay 2,550 pence per share, compared with a closing price in London on Wednesday of 1,558p; Kazinform refers to BBC.

To learn more go to www.bbc.co.uk