Faber Report CNBC
by: skeptically 03/28/02 04:57 pm
Msg: 279191 of 279194
CNBC's FABER REPORT: The H-P Drama Continues
03/28 3:57 PM (DJ)
Story 6571 DJ CNBC's FABER REPORT -2: Full Transcript Of Report
The following is a transcript of a report aired Thursday on CNBC by reporter David Faber:
It is not so much the fact that Walter Hewlett has decided to challenge the voting process in his battle to defeat H-P's acquisition of Compaq ... it is his decision to challenge that process before the votes have been counted.
Mr. Hewlett's lawsuit in Delaware today alleges that H-P management induced a change in votes by Deutsche Bank Asset Management by threatening Deutsche Bank's ability to do business with H-P in the future. In the final hours of the vote, a number of institutions switched sides, including a few that went to Mr. Hewlett's side. But Mr. Hewlett contends that what sources estimate were at least 17 million shares voted by Deutsche Bank Asset were reversed ... a number that can lead to a 34 million vote swing since the votes not only departed Mr. Hewlett's camp, but went in the company's. In a vote that could be as close as 20 to 30 million votes, those Deutsche Bank votes were important.
In his lawsuit Mr. Hewlett also argues that H-P made false and misleading claims with regard to the progress of its integration with Compaq ... claims that helped to sway the recommendation of ISS in favor of the deal.
It's unclear how this lawsuit will be viewed by the Delaware court. There was an expectation that a challenge to votes on both sides might follow the official count, especially if the margin of victory was within a percent or so of the votes cast.
Mr. Hewlett's lawsuit could have the effect of delaying the close of the deal, should the official vote count go against him, as is expected. That vote count is not expected to produce a preliminary result until mid April. It is true that by beginning his challenge now, Mr. Hewlett may be able to get a ruling from the court not too far after the official vote count is completed.
But at the same time, he appears to be following a scorched earth approach that won't do much to pave over differences with H-P management and its board. That board will soon nominate its directors to stand election and with his latest actions, people close to the board indicate it's unlikely Mr. Hewlett will be re-nominated.
(END) DOW JONES NEWS 03 -28 -02
04:48 PM |
