HP stockholders to vote on Compaq merger today

19 March 2002 Hewlett-Packard (HP) stockholders will vote today on the systems vendor’s proposed acquisition of rival Compaq at a special shareholder meeting.

Most votes have already been submitted, but analysts have no idea which way it will go. They say that the outcome remains too close to call. Compaq stockholders will cast their votes tomorrow, although they are expected to approve the deal by a large majority.

However, the final outcome of the HP voting will not be known for a number of weeks, as official counters must verify each vote. Retail stockholders own about a quarter of HP’s outstanding shares, while HP’s 20 largest shareholders account for approximately 30% of the company’s stock.

The Hewlett and Packard families control 18% of HP’s stock and will vote against the deal. In recent weeks, newspapers have been reporting the declared positions of many HP shareholders. Stockholders representing approximately 22% have declared their opposition to the deal, while representatives of just 9% of HP stock have announced their support.

Barclays Global Investors, Alliance Capital and Putnam Investments together own 6.9% of the stock and are the biggest names to have declared in favour of the deal.

However, two major groups that jointly own 5.9% of HP’s stock – translating into 114 million shares – have not revealed their positions. State Street Global Advisors has already voted, but has not said whether it is in favour of the deal or not. It has a 2.4% stake in the company.

Capital Research Portfolio says its portfolio managers will vote individually, not en bloc. It is believed that the majority of the company’s shares will be voted in favour of the deal.

According to Walter Hewlett, the son of one of HP’s co-founders and an HP company director, 72% of the shares owned by two HP related retirement plans have been cast against the merger. The Hewlett-Packard Tax Saving Capital Accumulation Plan and the Agilent Technologies Savings Accumulation Plan control around 34 million HP shares.

However, HP spokesperson Rebecca Robboy said Hewlett’s camp had mis-characterized the vote. “Employees hold shares in a variety of ways. This is not an indication of how employees will be voting,” she said. “We’re waiting for the full vote,” she continued. “The numbers will tell the story and the story is ours.”

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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