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

To: PCSS who wrote (96295)	3/19/2002 12:15:34 PM
From: Elwood P. Dowd	Read Replies (2) \| Respond to of 97611

Hewlett: Battle has been good for H-P Shareholders hear last pitches before voting By Mike Tarsala, CBS.MarketWatch.com Last Update: 12:12 PM ET March 19, 2002 CUPERTINO, Calif. (CBS.MW) - Hewlett-Packard shareholders greeted dissident director Walter Hewlett with a huge ovation Tuesday as they prepared to cast their votes on the largest proposed merger in the history of the technology industry. "For many decades," Hewlett told the shareholders, "H-P has presented a unique vision of the best an American corporation can be ... the very public, very spirited debate has also been about the soul of H-P and what it means to America." Hewlett addressed the meeting, which was delayed 30 minutes to allow the throngs of shareholders to arrive, after it was opened by CEO Carly Fiorina. Shortly after the meeting began, shareholders were told that the ballot boxes were open for their proxy cards. Hewlett insisted that the debate over the proposed merger had been healthy for the company. "The H-P Way is alive in employees, stockholders and in our communities," he said. "H-P is not a company in crisis. H-P has a promising future." With the $20.7 billion deal hanging in the balance after a media blitz by opposing sides, it's likely the votes will take several days to tabulate, though either side could claim victory as soon as Tuesday morning. The vote will be tabulated by hand. See full story. The case for the merger got a last minute boost when Capital Research, which holds 3.4 percent of H-P shares and is its largest institutional shareholder, was reported to be voting 65 million of its 69 million shares in favor of the merger. Compaq (CPQ: news, chart, profile) shares were little changed at $10.25 on the New York Stock Exchange, while H-P (HWP: news, chart, profile) shares rose 3.3 percent to $19.88 in morning trading. Heading into the final vote, the merger tally remains too close to call. The spread between the value that H-P places on Compaq and the price of Compaq shares has been widening in recent days, indicating that Wall Street is not certain the deal will go through. The result: The merger spread widened to 14.9 percent on Monday, up from a spread of 14.3 percent as of Friday's close and 9.4 percent on March 8, the previous Friday. "A spread of zero indicates the market assigns a 100-percent probability to the deal closing," said Donald Luskin, chief investment officer of Trend Macrolytics in Menlo Park, Calif. "The wider the spread, the more the market is voting that it falls through" Two more shareholders came out against the deal on Monday. The Teacher Retirement System of Texas, with 5.87 million shares, or a 0.3-percent stake in H-P, said it would vote against the merger. Wachovia Corp., which claims it has about a 0.1-percent stake, also said it planned to issue a "nay" vote. Public dissenters now represent about 25 percent of H-P's total shareholder base, while public supporters of the deal make up about 12 percent of the company's total 1.94 billion shareholders, including Capital Research. The votes still don't provide enough information to accurately gauge the proxy contest, however. Hewlett reiterated Sunday that the merger faces widespread opposition. He claims that more than 20 institutions are publicly against the transaction. His group says it has 55 percent support from those shareholders who voted on his green proxy cards. H-P's management called Hewlett's claims misleading, since they are based on results from green proxies that represent a small base of H-P shareholders. "He cannot know how even these shareowners have voted since (shareholders) can change their votes by delivering "for" votes on white proxy cards before the special stockholders meeting," H-P said in a statement. Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com.