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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (95554)	2/28/2002 3:58:01 PM
From: Captain Jack	Respond to of 97611

Not enough buyers, NW. Mkts look like shit mid-T

To: Night Writer who wrote (95554)	2/28/2002 5:12:16 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Key H-P proxy report is imminent Shareholder advisers' opinion may shape merger vote By Mike Tarsala, CBS.MarketWatch.com Last Update: 4:35 PM ET Feb. 28, 2002 PALO ALTO, Calif. (CBS.MW) -- A report that is likely to sway the opinion of many institutional shareholders on Hewlett-Packard's proposed acquisition of Compaq Computer could come as early as Friday. A recommendation either for or against the controversial deal is expected from Institutional Shareholder Services, a Rockville, Md.-based firm that advises more than 950 clients on how they should vote on corporate-governance issues. Patrick McGurn, an ISS vice president in charge of corporate programs, said the group has met with representatives from both sides in the proxy fight as recently as this week. Although highly influential, ISS approval isn't critical for H-P to win its fight for the $21 billion merger vs. dissident board member Walter Hewlett, said Bob Wayman, H-P's chief financial officer. "At most, it will sway 40 percent of shareholders," Wayman told reporters at the company's analyst meeting on Wednesday. But a "vote no" report would go a long way toward sinking the deal if ISS does recommend rejecting it. H-P shareholders are due to vote on March 19. Compaq shareowners will vote the following day. The Hewlett and Packard families and their foundations, which together own about 18 percent of H-P shares, already have declared they will vote their shares against the merger. Other fund managers representing roughly 2 percent of shares have also said they're opposed to the deal. About 23 percent of H-P shareholders subscribe to ISS, and will use its report to at least some degree. The report also is likely to sway non-ISS clients who are H-P or Compaq shareholders, Wayman said. At least one of H-P's largest holders, Barclays Global Investors, will cast their shares based solely on the opinion of ISS, so it can avoid a conflict of interest. Patricia C. Dunn, H-P board member, is the co-chairman and global chief executive of Barclay's Global Investors. So far, most institutional holders, owning 57 percent of H-P's shares, won't publicly say which way they're leaning. Dan Niles, a San Francisco-based analyst with Lehman Bros., says he expects ISS to give the proposed combination its blessing. "There's nothing compelling to say as to why you shouldn't vote for it," he said. "There's no compelling reason not to approve it." The nine-member council that will decide the official ISS position has met several times with H-P and Compaq officials, and has also met with Walter Hewlett. In addition to the high-profile ISS report, a lesser-known council affiliated with ISS is expected to simultaneously publish a separate opinion on the proposal. That report will be for the benefit of pension fund managers and labor-related clients who are expected to vote on the merger. Shares of H-P (HWP: news, chart, profile) rose 9 cents to $20.12 on volume of 7.6 million, while Compaq shares (CPQ: news, chart, profile) dropped 6 cents to $10.14.