Hewlett-Packard Co.s board of directors on Monday denied Walter Hewletts recent claims that he was pressured to vote in favor of the companys proposed $25 billion buyout of Compaq Computer Corp., and denounced the HP heirs portrayal of events leading up to the merger announcement in September.
“To suggest that you were pressured into approving the merger is inaccurate and inappropriate,” HPs board said in a statement sent to Hewlett and filed Monday with the Securities Exchange Commission.
Last month, Hewlett, a member of HPs board and son of late company co-founder William Hewlett, filed a statement with the SEC in which he claimed that he always opposed the deal, but that he joined in a unanimous board vote in favor of it only because of the strong urging of HP legal counsel Larry Sonsini.
According to Hewlett, Sonsini warned him outside a board meeting on Aug. 31 that the merger would go ahead with or without his support, and that his “nay” vote would only delay matters and end up costing HP more money.
Hewlett said he then voted to approval the deal, but made clear to his fellow board members that he would likely vote against it as a shareholder.
HP board members on Monday fired back, rejecting Hewletts characterization of events leading up to the companys Sept. 3 announcement of the merger.
“You were never advised that HP would be forced to pay a higher price for Compaq if you voted against the merger,” the statement signed by eight board members said. “In fact, there was no discussion regarding a non-unanimous board vote requiring the payment of a higher price for Compaq.”
Board members also criticized their dissident colleague for failing to attend other meetings at which financial details of the merger were discussed.
“We believe it is inappropriate that you neglected to disclose in your recent filing that you failed to attend key meetings of the HP board of directors at which financial and strategic aspects of the merger were discussed in detail,” the directors said.
In addition, the board said it wasnt aware of Hewletts intention to vote his shares against the deal until he notified company executives 30 minutes before releasing a public statement denouncing the deal on Nov. 6.
At that time, Hewlett declared that he and fellow family members who control about 5 percent of HPs shares would vote against the deal. Last month, the family-run foundation representing late HP co-founder David Packard, which controls about 10 percent of HP stock, announced that it, too, would vote to reject the merger.
Despite the growing opposition, the board today once again asserted that it remains committed to completing the merger, and belittled Hewlett for offering no other viable options for turning around the troubled computer maker.
“We collectively concluded that the merger represented by far the single best strategic alternative for the company,” the directors said. “Quite frankly Walter, you have never offered an alternative strategy that we all havent debated and rejected.”