H-P Claims Victory (Again) in Shareholder Tally

April 18, 2002 (PLANSPONSOR.com) - After a month of counting votes, a (still) preliminary count shows Hewlett-Packard (H-P) prevailing in its proposed acquisition of Compaq Computer - but by a razor-thin margin.

Independent proxy tabulation firm IVS Associates of Newark, Delaware told HP yesterday that 51.4% of the shares voted favored the $19 billion acquisition, compared with 48.6% against – in all, a margin of about 45 million votes favored the merger, according to the current tally.  Shareholders voted the issue on on March 19.

Shades of Florida

The tabulation of the vote is an arduous process since shareholders can change their votes as many times as they want prior to the close of voting – which means that shareholders could have submitted several contrasting votes during the contentious campaign. 

The result could take at least another week to become official because dissident director Walter Hewlett, who led the campaign against the acquisition, wants a recount.  Even then, each side can challenge certain ballots.

Hewlett has challenged the results of the vote in a Delaware court – claiming that H-P exercised undue influence in convincing asset manager Deutsche Bank to switch the vote of 17 million shares of the 25 million it voted at the last minute.  Deutsche Bank has denied any wrongdoing. 

Margin ‘Call’

While those 17 million shares wouldn’t appear to be enough to overcome the current margin of victory for H-P, Hewlett also says H-P misled other investors regarding the extent of its integration efforts with Compaq. That trial is scheduled to begin next week. However, whatever the judge decides, one or both sides can make an appeal on the decision to the Delaware Supreme Court, which is generally viewed as the ultimate arbiter in such cases, according to Dow Jones.

In addition, the SEC has asked for information about H-P’s relationship with the investment manager.    
H-P CEO Carly Fiorina had said that shareholders had approved the deal by a “slim but sufficient margin” immediately after the March 19 vote while Hewlett had maintained the vote was too close to call.

Fiorina said in an e-mail to employees she was delighted by the result and hoped the Compaq deal could be completed by early May, according to the Associated Press.

Leak Speak

In that same email Fiorina told H-P workers that the an H-P employee who had leaked two memos to the media has been dismissed. She added that H-P is continuing to investigate how a voice-mail message that she left for Chief Financial Officer Bob Wayman was leaked to the media, and said that it appears the voice mail was intercepted from Mr Wayman’s home or cellphone rather than from H-P’s voice-mail infrastructure, according to the Wall Street Journal’s online edition.