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Walter’s suit dismissed, HP-Compaq merger cleared

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CIOL Bureau
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BANGALORE: A Delaware, US, court has rejected the plea of dissident former Hewlett-Packard board member Walter Hewlett for a recounting of the March 19 vote clearing the final hurdle in the merger of Compaq with HP. The court has ruled that the voting was legal and consequently dismissed all claims made by Walter Hewlett during the hearing of the case last week. The three-day hearing saw the charismatic HP CEO, Carly Fiorina taking the stands to defend the merger.

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Despite the suit, both HP and Compaq had continued the merger process and Fiorina had said that the merger was expected to be completed on May 7. The $19-billion tech merger now awaits the formal declaration of the voting results by the independent agency IVS Associates. According to a preliminary counting, the merger was okayed by HP shareholders by a margin of 45 million votes (3 per cent).

Walter Hewlett said in a statement that he was disappointed with the ruling and would study it before announcing the future course of action. He had accused that HP failed in informing its shareholders about the problems it was facing in the merger process before the voting and that the company had illegally forced a last minute change in the voting decision of Deutsche Bank in favor of the merger. The dramatic revelation of a voice mail of Fiorina meant for her Chief Financial Officer asking him to do something extraordinary to get the support of Deutsche Bank had further added excitement to the case.

The court ruled that Hewlett had failed to prove his allegations. It said that the "plaintiffs have failed to prove that HP management improperly enticed or coerced Deutsche Bank into voting in favor of the merger."

For a full coverage of the HP-COmpaq merger, click here.

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