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Although Hewlett-Packard Co. is pressing on with its integration plans for Compaq Computer Corp., issues surrounding the proposed buyout are far from settled. In addition to the fact that the official HP shareholder vote has not been tallied, HP board member Walter Hewlett, the most vocal opponent of the acquisition, late last week filed a lawsuit accusing HP officials of improperly pressuring a large shareholder into voting for the controversial $19 billion merger.
Hewlett said in his suit, filed in Delaware, that Deutsche Asset Management, a division of Deutsche Bank AG, 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 March 19, shortly before the start of HPs special shareholder meeting, voting 17 million of its 25 million shares in support of the merger. HP, of Palo Alto, Calif., “tainted more than enough votes to swing the election in favor of the merger,” said the lawsuit.
HP denounced the accusations.
HP Chairman and CEO Carly Fiorina announced just 30 minutes after voting stopped two weeks ago that it appeared HP shareholders had approved the vote. Hewlett, however, has argued that the vote was too close to call. Official results may not be known for weeks, said IVS Associates Inc., a Newark, Del., company hired to oversee the tallying of ballots.
Nevertheless, Fiorina and Compaq Chairman and CEO Michael Capellas told workers last week that the companies are moving forward with preparations to complete the merger by late this month or early next month. A memo to employees said the executives this week will detail how the combined company will determine which workers will stay.
Earlier last week, HPs Webb McKinney and Compaqs Jeff Clarke, co-leaders of the integration effort, disclosed in an internal memo that theyve formed a “launch team” and boosted the number of employees working full-time on the merger to more than 1,200 and that a “launch team” was created for when the two companies become one. The launch teams priorities include distributing product road maps; go-to-market strategies; and service and support offerings to employees, customers and business partners.