Unwilling to let Walter Hewlett's lawsuit derail its plans, Hewlett-Packard Co. on Monday announced 1,000 managers who will assume leadership roles if the company's buyout of Compaq Computer Corp. goes through.
Unwilling to let Walter Hewletts lawsuit
derail its plans, Hewlett-Packard Co. on Monday announced 1,000 managers who will assume leadership roles if the companys buyout of Compaq Computer Corp. goes through.
The appointments, disclosed to employees of both companies in an internal memos Friday, comes as HP awaits a Delaware judges ruling in the lawsuit filed by former director Hewlett aimed at blocking the $19 billion acquisition of the Houston-based computer maker.
"Well be continuing to roll out management changes," said HP spokeswoman Rebecca Robboy, noting the appointments follow the naming earlier this month of 150 senior executives who will assume their new positions once the buyout is complete. "Were moving ahead with our integration plans," she said, with the companies expecting to complete the merger in "a few weeks."
The Palo Alto, Calif., company did not release copies of the memos to the public.
However, HP and Compaq still face several potential obstacles to their controversial merger, most notably Delware Chancery Court Judge William Chandler IIIs ruling on a lawsuit brought by HP heir Hewlett that accused HP of misleading shareholders and coercing investors to win a shareholder vote to proceed with the deal.
Last week, Hewlett, who led a seven-month campaign to block the buyout, sought to show HP executives manipulated investors by providing them with financial projections related to the merger that contradicted the companys own internal reports. Hewlett also alleged HP threatened to withhold business from Deutsch Bank if the financial institutions investment arm failed to vote its HP shares in favor of the deal in the shareholder election March 19.
HP Chairman and CEO Carly Fiorina testified at the trial, repeatedly rejecting the allegations during seven hours of testimony in a Wilmington, Del., courtroom. Bob Wayman, HPs chief financial officer, and Jeffrey Clarke, Compaqs CFO and co-leader of the merger integration teams, also were called to testify and joined Fiorina in denouncing the accusations.
Hewlett also testified, admitting that much of the lawsuits contention that HP misled shareholders was based on rumors.
A ruling from Chandler is expected to be issued early this week, with many court observers predicting hell clear HP of the charges. However, should he find in favor of Hewlett, the judge could block the buyout and order HP to hold another shareholder vote on the deal. Such action, which would legitimize Hewletts claim of corporate mismanagement, would likely derail the deal and potentially result in Fiorinas ouster as chief executive.
But even if HP successfully defeats the lawsuit, it still faces two federal investigations into its proxy fight. The U.S. Attorneys Office for the Southern District of New York has subpoenaed HP to turn over documents related to its lobbying of investors Deutsch Bank and Northern Trust, the computer maker disclosed this month. In addition, the federal Securities Exchange Commission has asked HP to voluntarily turn over information related to its shareholder lobbying efforts.
HP has said it is cooperating with both investigations. Both representatives of the District Attorneys Office and the SEC declined to comment on their separate probes.