UPDATE: Hewlett sues over HP proxy solicitation
Walter Hewlett has filed suit against Hewlett-Packard Co. (HP), taking issue with the process by which HP solicited votes for approval of its acquisition of Compaq Computer Corp., he said Thursday.
The suit was filed Thursday in the Delaware Chancery Court by Hewlett and Edwin E. van Bronkhorst, a fellow trustee of the William R. Hewlett Revocable Trust, Hewlett said in a statement. He is suing both on his own behalf and on behalf of the trust.
The complaint focuses on HP's process for soliciting votes from large institutional stockholders, particularly Deutsche Bank AG. Hewlett has requested that the court expedite its proceedings so the issue can be resolved as quickly as possible, he said. His goal is to ensure the outcome of last week's stockholder vote was determined in a "fair, full and lawful manner," he said in his statement.
HP dismissed the lawsuit as without merit.
"We find it regrettable that Mr. Hewlett has chosen to resort to baseless claims without regard to the impact of his false accusations on HP's business reputation and employees," the company said in a prepared statement. "We continue our progress in planning for a successful integration of our merger with Compaq."
Copies of the lawsuit were not immediately available from the court, which has been overwhelmed with requests.
Hewlett alleges in the lawsuit that HP pressured a division of Deutsche Bank, Deutsche Asset Management, to vote for the deal by suggesting the bank would lose future HP business if it opposed the acquisition, according to reports by several news organizations.
The suit states that Deutsche Bank originally voted more than 25 million shares against the merger, but reversed course at the last minute and revoted many of those shares in favor of the deal, according to reports. Voting rules allowed HP shareholders to cast multiple votes during the proxy fight, with only the most recent vote counting in the official results.
HP Chairman and Chief Executive Officer Carly Fiorina said last week that HP's preliminary analysis showed it had won approval of the deal by a "slim but sufficient" margin. Hewlett maintains that the vote was too close to call.
Official certification of the vote rests with IVS Associates Inc., which expects its analysis of the ballots to take several weeks. In a contest widely expected to have been won or lost on a vote spread of less than 1 percent, Deutsche Bank's vote may have been a deciding one.
One IT industry analyst said a lingering lawsuit would be a worst-case scenario for HP.
"If it lingers, than they really can't move forward, and they can't go back and resume their lives as separate companies," said Gartner Inc. Research Director Paul McGuckin, who had not yet seen a copy of the lawsuit.
"Being in a kind of limbo environment is a worst case for them because it makes them much more vulnerable to their competitors, who are already after them," McGuckin said.
He noted efforts are under way by Sun Microsystems Inc., Dell Computer Corp., and IBM Corp. to nurture a "FUD" (fear, uncertainty and doubt) campaign targeted at HP and Compaq customers.
ITworld.com
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