HP Chief's Merger Comments Surface
By BRIAN BERGSTEIN
AP Business Writer
HP Chief's Voice Mail Comments May Be Relevant in Hewlett Lawsuit, Could Cloud Merger
SAN JOSE, Calif. (AP) -- Two days before Hewlett-Packard Co. shareholders voted on the contested purchase of Compaq Computer Corp. (NYSE:CPQ - news), HP chief Carly Fiorina told another executive they might have to take "extraordinary" steps to win over two big investors.
ADVERTISEMENT
Fiorina's late-night message to chief financial officer Robert Wayman surfaced Wednesday, when the San Jose Mercury News reported that the voice mail was anonymously forwarded to one of its reporters.
The disclosure comes as HP's last-minute moves to win support for the $19 billion Compaq deal are at the center of a lawsuit against the company by dissident director Walter Hewlett.
Hewlett, the son of an HP co-founder and the leader of the proxy fight against the deal, claims HP improperly got the investment arm of Deutsche Bank to switch 17 million votes in favor of the deal by threatening to take future business away. Deutsche Bank had helped arrange a multibillion-dollar line of credit for HP just days earlier.
Hewlett wants a Delaware judge to throw out Deutsche Bank's votes, which he believes were enough to give HP what Fiorina called a "slim but sufficient" margin of victory in the March 19 vote.
HP confirmed that Fiorina's message to Wayman -- which apparently was retrieved by someone with access to an internal server connected to the company phone system -- was authentic. The company said nothing discussed in the message was improper or illegal.
However, Hewlett spokesman Todd Glass said Hewlett's lawyers believe the voice mail is relevant to the Delaware case and expect it will be turned over in the pretrial discovery phase. The trial is set to begin April 23.
In her voice mail to Wayman, Fiorina said she and HP's proxy solicitor were nervous that Deutsche Bank and Northern Trust, another large HP shareholder, would reject the deal.
"And so the suggestion is that you call the guy at Deutsche Bank again first thing Monday morning," Fiorina said in the voice mail, left March 17. "And if you don't get the right answer from him, then you and I need to demand a conference call, an audience, etc., to make sure that we get them in the right place. So Alan (Miller, HP's proxy solicitor) is feeling like you need a definite answer from the vice chairman, and if it's the wrong one, we have to swing into action. ...
"So if you would take Deutsche Bank, I'll take Northern Trust, get on the phone and see what we can get, but we may have to do something extraordinary for those two to bring 'em over the line here."
Wayman released a statement saying top HP executives were constantly assessing whether they had effectively pitched the deal to large investors and "did in fact make extraordinary efforts" in the final days, with dozens of last-minute presentations.
A source familiar with HP's strategy, speaking on condition of anonymity, told The Associated Press that Fiorina and Wayman had originally thought Deutsche Bank would vote for the deal on the advice of Institutional Shareholder Services, an independent proxy firm that endorsed the acquisition. At the time of Fiorina's voice mail to Wayman, the source said, HP had not yet made a formal presentation to the bank.
Deutsche Bank has refused to comment. The president of Northern Trust told the Mercury News its vote did not change in the waning days or split it.
HP shares were up 22 cents at $17.63 in morning trading on the New York Stock Exchange, where shares of Houston-based Compaq were up 25 cents to $9.53.
------
On the Net:
Voice mail available at: multimedia.realcities.com:8080/ramgen/bayarea/news/carlyshort.rm
hp.com
compaq.com
Hewlett's opposition site: votenohpcompaq.com |
