Hewlett-Packard Tuesday apparently won the final battle in its lengthy campaign to win approval of its intended acquisition of Compaq Computer, as a judge dismissed a lawsuit from former HP board member Walter Hewlett that sought to block the acquisition.
The ruling largely clears to way for HP to complete its announced plan to launch as a merged company on May 7.
After a three-day trial last week in Wilmington, Delaware, Chancery Court Judge William Chandler III rejected Hewlett's charge that HP's shareholder vote on acquiring Compaq should be thrown out because of misleading statements and shareholder coercion by HP executives.
Hewlett said in a prepared statement that he is disappointed with the court's decision but grateful that it processed the case so quickly. He and the trustees of The William R. Hewlett Revocable Trust plan to review the judge's written decision and then decide on a course of action, according to the statement.
Hewlett, who lost his seat on HP's board last week after the board chose not to re-nominate him, said his involvement in HP is not over. As a representative of foundations holding significant stakes in the company, he will continue monitoring HP's performance to ensure that it acts in stockholders' best interests, he said.
An HP spokeswoman did not immediately return a call seeking comment.
The last remaining requirement for HP is official certification of the outcome of the shareholder vote. A preliminary tally, conducted by outside inspector IVS Associates Inc., showed the acquisition passing by a margin of 45 million votes, with 51.4 percent of shares voted in favor of the deal.
Hewlett requested a ballot recount, which is ongoing. An IVS Associates representative referred questions about the recount to HP, which did not return calls Tuesday. Hewlett spokesman Todd Glass said the recount began last week.
"The last I heard, it was going slowly," Glass said.
Once the recount is finished, Hewlett's dissident group can challenge the result, a process that could take an extra day or two to resolve, according to HP. Barring a successful challenge, a certified result affirming the acquisition's passage would be released, clearing the way for HP to finalize the acquisition.
However, legal aftershocks from the contentious acquisition process could continue plaguing HP long after it absorbs Compaq.
A second HP shareholder filed suit against the company Friday, also in Delaware's Court of Chancery, echoing Hewlett's allegations and seeking financial compensation for shareholders for damages sustained from the allegedly "tainted" acquisition process. Shareholder Donna Schneider is seeking class-action status for her complaint.