HP/COMPAQ: Ruling to come shortly on lawsuit dismissal

A Delaware state court judge will rule within the next several days on Hewlett-Packard's (HP's) motion to dismiss Walter Hewlett's lawsuit seeking to block HP's intended acquisition of Compaq Computer.

Chancellor William B. Chandler III heard more than two hours of arguments Sunday from both sides' legal teams, after which he indicated that he will need additional time to consider HP's dismissal request. If the case is not dismissed, it is scheduled for a trial beginning April 23.

HP board member and acquisition opponent Hewlett filed suit March 28, charging that HP improperly coerced Deutsche Asset Management Inc., a division of Deutsche Bank AG, to reverse its intended vote and support the acquisition. He also alleged that HP's management kept from shareholders information indicating that absorbing Compaq will cost more and save less than HP publicly estimated.

Among the remedies Hewlett seeks are an invalidation of Deutsche Bank's pro-acquisition votes and an injunction barring HP from completing the acquisition.

HP said in a statement Sunday that it continues to believe Hewlett's allegations are without merit, and that it remains confident it will prevail in court.

The company has begun releasing post-acquisition organizational plans and other details, including news of a planned pay raise for HP Chairman and Chief Executive Officer Carly Fiorina. HP is waiting for official certification of results from its March 19 shareholder vote. That certification is being completed by IVS Associates Inc., which said in March it anticipated taking several weeks to complete its tabulation and analysis.

Once IVS Associates certifies the shareholder vote, HP plans to quickly finalize the acquisition and launch as a merged company within several days of the deal's legal close.

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