=DJ Merger Opponent Hewlett Releases Final Brief In H-P Case
By Mark Boslet Of DOW JONES NEWSWIRES (This report was originally published Monday.)
PALO ALTO, Calif. (Dow Jones)--Arguing that Hewlett-Packard Co.'s (HWP) merger vote was "neither free nor fair," opponent Walter Hewlett asked the Delaware Chancery Court to discard it, according to a final legal brief.
Hewlett, the dissident director and founding family heir, says the proxy tally collected at a March 19 shareholder's meeting was "tainted by misrepresentations and omissions as well as a misuse of corporate patronage," the document says.
The brief was submitted to the court Friday evening and released publicly Monday afternoon. It is meant to serve as a final summary to last week's three-day trial on the bitter dispute over H-P's $18 billion plan to buy Compaq Computer Corp. (CPQ).
H-P's attorney's released a copy of their final brief on Saturday and in it asked Judge William Chandler III to dismiss the case, claiming Hewlett failed to provide enough evidence.
Hewlett had filed a lawsuit in late March claiming H-P executives, including Chief Executive Carly Fiorina and Chief Financial Officer Robert Wayman, had threatened Deutsche Bank AG to change its vote on 17 million shares at the last minute to favor the merger. Hewlett claimed that H-P warned Deutsche it could otherwise lose future banking business, according to the suit.
He also claimed Fiorina and other HP managers kept internal financial reports from shareholders prior to the vote because the reports questioned the financial progress HP had made planning the combination of the two companies.
H-P Denies Charges
But Hewlett says he has provided adequate proof supporting his claims, according to the new brief. Fiorina and Wayman were shown at trial to have been "barraged with information showing a material, consistent and growing pattern of concern about HP's ability to deliver its publicly disclosed financial goals for the new company."
The information contained words such as "ugly," "frightening" and "huge problem" to describe the financial concerns, the documents states. Also referenced is a diary entry from Compaq Chief Executive Michael Capellas which pointed out that "at current course and speed we will fail."
The brief goes on to address the Deutsche Bank claim, arguing that "no stronger case could be made against such sophisticated parties, who would very naturally act indirectly and with subtle, but clear signals."
Deutsche Bank has an undisclosed business relationship with H-P and stands to earn a $1 million "success fee" if the merger goes through, the document states. Fiorina, meanwhile, told Deutsche Bank officials on a committee debating the company's proxy vote that the approval of the merger was "of great importance to our ongoing relationship."
The evidence shows "Deutsche Bank asset managers were cowed into supporting the merger," the brief says. "This is a case of facts versus spin."
-By Mark Boslet, Dow Jones Newswires, 650-496-1366; mark.boslet@dowjones.com
(END) DOW JONES NEWS 04-30-02 |
