Hewlett-Packard ready to throw Hewlett off board
By Peter Henderson
SAN FRANCISCO, April 26 (Reuters) - Hewlett-Packard Co.(NYSE:HWP - news) shareholders are expected on Friday to elect a new board of directors that excludes founding family scion Walter Hewlett, who had opposed the company's proposed merger with Compaq Computer Corp.(NYSE:CPQ - news)
The changing of the guard at the annual meeting, where shareholders have no alternative to the slate of directors put forward by the board, will mark the first time in the 63-year history of the company that no member of the founding families will have a seat on the board.
The Hewlett and Packard families -- with about 18 percent of HP stock -- strongly opposed the $18 billion merger that Chief Executive Carly Fiorina has campaigned for.
Fiorina faces shareholders at the second meeting in two months on Friday. Aside from the board election, the agenda this time will not address the contested merger, which was considered on March 19 in a vote that HP says it won, although the results have still not been officially certified.
Hewlett cannot be reelected since the board did not renominate him, refusing to do so after he sued to overturn the merger vote. By the time he launched his suit, the deadline for shareholders to nominate other directors had passed.
A Delaware business court is considering the suit by Hewlett to throw out the March 19 vote, and Hewlett is examining and challenging the preliminary count of the vote made by an independent vote counter.
Lawyers from both sides must file by midnight on Friday their closing briefs in the suit, the focus of an emotional three-day trial that ended on Thursday in which Fiorina said she had neither bought votes nor lied to win the deal.
Observers generally expect the judge to release his decision on Monday, or Tuesday at the latest.
Shares of Compaq have closed in on the price implied by the terms of the merger since the trial began on Tuesday, although the gap increased slightly on Friday. Compaq shares traded 5.7 percent below the implied price in late Friday trade, indicating that expectations were strong the deal would close.
HP shares had fallen 2.4 percent, or 42 cents, to $16.96, while Compaq shares dropped 2.68 percent, or 28 cents, to $10.18 on the New York Stock Exchange.
"Walter Hewlett has rested his case and we think he is far short of having enough evidence for his lawsuit to succeed," said Andrew Whittaker, a Lehman Bros. arbitrage trader who makes money by betting on the chance of mergers succeeding.
At the meeting due to open at 2 p.m. PDT (2100 GMT) shareholders also will vote on confirming Ernst & Young as auditor and vote on two shareholder proposals.
Shareholder activists have put up for vote resolutions to study increased recycling of personal computers and to commit HP to a set of human and labor rights standards in China. Management opposes both proposals. |
