No Ruling on HP Merger at Delaware Court Monday
WILMINGTON, Del (Reuters) - The Delaware business court judge deciding the fate of Hewlett-Packard Co.'s (NYSE:HWP - news) planned $18 billion takeover of Compaq Computer Corp. (NYSE:CPQ - news) did not file a ruling on Monday, a court official said.
Representatives of Hewlett-Packard and Walter Hewlett, the founding family scion who sued to overturn what he calls a tainted shareholder vote on the deal, both said they were not aware of a decision.
Analysts and investors expected a ruling in the closely watched case Monday or Tuesday.
The registry official at the Delaware Chancery Court said Judge William Chandler, who presided over a three-day trial last week and received closing briefs late on Friday, had not given the office his decision by the end of the business day.
Hewlett's team released its closing trial brief late on Monday, telling Chandler that HP Chief Executive Carly Fiorina and her team had left a trail of "small details" that showed "clear -- and devastating -- patterns".
"The vote was tainted by material misrepresentations and omissions as well as a misuse of corporate patronage and should be set aside by this Court," lawyers wrote, alleging that HP had covered up information that merger planning was behind schedule and had "bought or coerced" votes from shareholder Deutsche Bank Asset Management.
HP in its final brief argued that internal projections quoted by Hewlett's team were not comparable with official forecasts and asked Chandler to clear Fiorina's name and "force Walter Hewlett and his team to face reality. They lost."
Chandler could throw out the vote, as Hewlett requested, dismiss Hewlett's challenge or throw out 17 million contested ballots which Hewlett alleges Deutsche Bank Asset Management cast in favor of the merger under pressure from HP management.
Throwing out the Deutsche ballots might not change the outcome of the vote, however, since HP claims a 45 million vote margin of victory in a preliminary tally by the independent company hired to make the count. Hewlett is examining that count.
Shares of HP closed up a penny at $16.97, while Compaq rose about 1.5 percent, or 15 cents, to $10.30 on the New York Stock Exchange, reflecting expectations that the merger would close.
Since merger plans were announced on Sept. 3, shares of HP have underperformed the computer hardware sector, dropping more than 26 percent, compared with a drop of about 16 percent each for International Business Machines Corp. (NYSE:IBM - news) and Compaq and a 5 percent drop for the American Stock Exchange Computer Hardware Index (^HWI - news).
HP says it would be a stronger competitor to IBM and become a leader in a consolidating market for technology and related services through the merger. Hewlett argued HP would be dragged more deeply into the lower-margin personal computer business by acquiring No. 2 PC maker Compaq.
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