In the suit filed in Delaware Chancery Court, Hewlett
alleged that H-P had improperly solicited votes with “a
series of improper acts,” according to a Wall Street
For example, Hewlett alleged that Deutsche Asset Management (DAM) originally planned to vote more than 25 million shares against the H-P – Compaq deal, but later switched as a result of H-P’s efforts ‘to entice and coerce’ – eventually voted as many as 17 million shares for the deal. The reason, according to Hewlett’s suit: It feared losing future business from H-P.
H-P induced Deutsche Bank to switch sides by adding the bank as a co-arranger on a multibillion-dollar line of credit in the days before the vote, according to the report. Then, “Deutsche Bank was led to understand that if it did not switch its votes in favor of the proposed merger, its future business dealings with H-P would be jeopardized,” the lawsuit said.
As of December 31, DAM was the 11th largest H-P institutional shareholder, and its block represented 1.31% of the company’s shares, according to a Securities and Exchange Commission filing. Hewlett calculates that management won by less than 1% of the vote, which would roughly equal the 17 million plus shares Deutsche Bank allegedly changed.
Hewlett-Packard said the suit in a Delaware Chancery Court was baseless and false and vowed to vigorously defend the March 19 shareholder vote, which it believes it won by a slim margin, according to Reuters.
Despite the continued wrangling over the deal, H-P executives continue to move forward with efforts to mix the Palo Alto, California-based H-P and the Houston-based Compaq.
Based on a preliminary vote, Fiorina declared on March 19 the company had won a “slim but sufficient” majority of votes, giving her a tentative mandate.
Still, Hewlett hasn’t conceded defeat, and an official count of shareholder votes could take several weeks.