Hewlett-Packard Co. improperly pressured one of its largest shareholders into voting for the companys controversial merger with Compaq Computer Corp., according to a lawsuit filed Thursday by Walter Hewlett.
Hewlett, an HP board member and son of one of the companys co-founders, said in his suit that Deutsche Asset Management, a division of Deutsche Bank, HPs 11th largest institutional shareholder, was “led to understand that if it did not switch votes in favor of the proposed merger, its future dealings with HP would be jeopardized.”
As a result, the suit claims, Deutsche Bank changed its vote on March 19, shortly before the start of HPs special shareholder meeting, voting 17 million of its 25 million shares in support of the merger.
The lawsuit marks the latest salvo in a bitter proxy fight between HP management and Hewlett, who has led a five-month lobbying effort to derail the deal, valued today at $19 billion.
HP quickly denounced Hewletts claims as “baseless.”
The Palo Alto, Calif., companys actions “tainted more than enough votes to swing the election in favor of the merger,” said the lawsuit filed today in Delaware Chancery Court in Wilmington, Del.
Shortly after the suit was filed, HP issued a statement rejecting Hewletts assertions.
“We believe this suit is completely without merit and intend to vigorously defend it,” the company said. “We find it regrettable that Mr. Hewlett has chosen to resort to baseless claims without regard to the impact of his false accusations on HPs business reputation and employees.”
A half hour after the polls closed at the shareholder vote, HP Chairman and CEO Carly Fiorina declared that preliminary estimates indicated that the company secured shareholder support to go forward with its buyout of Houston-based Compaq.
However, the vote may not be certified for several weeks, according to representatives of IVS Associates Inc., a Newark, Del., company hired to oversee the tallying of ballots.
Hewlett last week refused to concede defeat, arguing that the vote was “too close to call.”
While the lawsuit urged swift court action “so that these very important issues can be resolved as soon as possible,” it is unclear what impact the filing may have on the proposed merger, tentatively set to be completed in late April or early May.
- HP, Compaq Form Launch Team
- HP Presses On as Votes Tallied
- Compaq Shareholders Approve HP Deal
- Hewlett, HP Trade More Jibes
- Special Report: HP Courts Compaq