Administration August 4, 2002

Ruling Threatens HP-Compaq Merger

April 8, 2002 (PLANSPONSOR.com) - In a decision that puts Hewlett Packard's merger with Compaq Computer Corp in jeopardy, a Delaware court has ruled in favor of Walter Hewlett, whose suit charges that HP improperly secured the shareholder votes to approve the $19- billion merger.
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In the ruling, Judge William Chandler of the Delaware Chancery Court denied HP’s motion to dismiss Hewlett’s disclosure claim. A trial for the lawsuit is scheduled on April 23 before Chandler, according to a report from Down Jones.

Late last month, Mr. Hewlett filed a lawsuit accusing HP of improperly coercing Deutsche Asset Management, a large shareholder, into voting a large block of shares in favor of the deal. He also charges that HP did not disclose that its planned integration efforts would not meet their targets.

The shareholder votes are still being counted, but HP has claimed it has received enough votes to proceed with the merger.

Hewlett was the sole board member to oppose the merger of the two computer companies.

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