HP/Compaq: Merger decision due soon


HP/Compaq: Merger decision due soon

A court trial in which Hewlett-Packard director Walter Hewlett challenged a vote in favour of HP's merger with Compaq Computer has been adjourned. A ruling is expected imminently from the judge who presided over the three-day proceedings.

There were no closing remarks and Judge William Chandler III said he understood the time constraints in the case, referring to HP's plan to launch the merger on 7 May and the fact that HP is holding its annual meeting today (26 May) in California. He said he would have a decision as soon as possible.

The final witness in the case was Boeing chairman and chief executive Phil Condit who is also an HP director. Condit further bolstered HP's claims that documents questioned by Walter Hewlett were planning estimates and were not needed by the board or shareholders in making a decision on the merger. Hewlett's lawyer suggested that the documents, prepared by middle managers from HP and Compaq, were kept from shareholders because they predicted overly pessimistic financial results if the companies should merge.

Earlier in the day, HP chair and chief executive Carly Fiorina was again called to testify on a conference call between HP and officials of Deutsche Bank. During the trial, Hewlett's lawyer tried to show that HP pressured Deutsche Bank to switch millions of votes to favour the merger. Fiorina denied that any pressure was exerted on Deutsche Bank to support the merger.

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