=DJ H-P Up -2: Company To Hold Press Conference Tuesday >HPQ
By Donna Fuscaldo Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Hewlett-Packard Co. (HPQ) shares edged higher Monday on the first day of trading since the closure of its hotly-contested merger with Compaq Computer Corp.
After battling it out with former dissident board member Walter Hewlett, who opposed the merger of the two computer makers for months, H-P got the green light from a Delaware Chancery court to merge with Compaq.
Hewlett, son of one of the late co-founders had launched a lawsuit in March, following on the heels of his proxy battle, aiming to stop the combination from going through. He alleged that H-P withheld key information from shareholders about the integration of its merger and was also involved in a vote-buying scheme to win shareholder support for the combination.
But last week, Delaware Chancery court judge William Chandler III put an end to the fighting, by ruling that Hewlett failed to prove his claims, paving the way for the merger with H-P and Compaq to go through.
But despite H-P's victory, which the company claimed early on, Bear Stearns analyst Andrew Neff reiterated his neutral stance on H-P in a Monday research report. The analyst said concerns about the execution of the merger, industry fundamentals and valuation still exist.
According to Neff, H-P and Compaq's "urgency" to exceed expectations during the proxy battle may now dissipate.
"There was a sense of urgency present that we had not seen in either company prior to the challenge by Walter Hewlett," wrote Neff. "The question we have at this point is: can they keep it up and deliver on expectations?"
H-P is scheduled to report second quarter earnings for the stand alone company after the close of trading May 14.
Shares of Hewlett-Packard, which changed its stock symbol to HPQ to reflect its marriage with Compaq Monday, were recently trading up 1.3%, or 23 cents, to $17.66, on volume of 1.6 million shares. Average daily volume is 12.1 million shares.
Trading in shares of Compaq were suspended before the market open Monday. The new company is slated to hold a press conference Tuesday to announce the official launch of the merged H-P.
-By Donna Fuscaldo, Dow Jones Newswires; 201-938-5253; donna.fuscaldo@dowjones.com
(END) DOW JONES NEWS 05-06-02
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