HP Claims Victory In Compaq Merger Vote; Results Disputed

By Agence France-Presse Hewlett Packard Co. said March 19 that shareholders approved the hotly contested merger with Compaq Computer Corp., but the result was swiftly disputed by merger opponents as premature. In a statement, HP said that "based on a preliminary estimate of shareowner proxies by its proxy solicitor, [HP] believes it has received sufficient votes to approve HP's merger with Compaq Computer Corp." CEO Carly Fiorina said shareholders had approved the company's plan by a margin which is "slim but sufficient." For his part, Walter Hewlett, the dissident HP board member and family heir who has been battling to block the deal, refused to admit defeat, saying the vote remains "too close to call." "We stand by our statement that the results of today's vote are too close to call ... it is simply impossible to determine the outcome of the vote at this time," he said in a statement. HP acknowledged that its estimate was not an official tally and that official certification of the voting results "is expected in the next few weeks." "We are gratified that HP shareowners recognize the compelling strategic and economic benefits of the merger and that a decisive majority of shares not affiliated with the Hewlett and Packard families and foundations appear to have been voted in favor of this transaction," said Fiorina. The vote to ratify or torpedo the $22 billion merger capped a six-month civil war between HP's hard-charging CEO and Walter Hewlett. Fiorina, whose future is seen as riding on ratification of the deal, opened the session. Hundreds of Hewlett-Packard shareholders lined up -- some wearing colors to show their views on the controversial merger with Compaq Computer -- early, hours before the opening of the meeting. Many of those lining up were individual shareholders, and some were dressed head-to-toe in green -- indicating they would cast the green "no" ballots on one of the biggest technology mergers ever. The battle has included incendiary newspapers ads and open letters in which Fiorina's company and Hewlett traded charges of corporate malfeasance and incompetence. Compaq shareholders were due to vote Wednesday on the deal, which has already been cleared by regulators. Compaq said in a statement that it was "pleased" after HP said it had sufficient votes to approve the merger. "Over the past several months, there has been a groundswell of support from customers, partners and shareholders who are favorable toward the merger as they examine its strategic rationale," said Compaq Chairman and CEO Michael Capellas. "We continue to believe that this merger will rapidly accelerate our strategy, improve overall earnings power and provide increased value for customers, shareholders and employees. With the HP vote now behind us and the Compaq shareholder vote Wednesday, we are very close to making this merger a reality," Capellas said. Copyright Agence France-Presse, 2002