HP/COMPAQ: Compaq vote expected to excite little ire

Compaq Computer shareholders are expected to arrive at a rare moment of accord Wednesday as they cast their final votes for the proposed US$21 billion acquisition by Hewlett-Packard.

Compaq investors will gather at The Wyndham Greenspoint Hotel in Houston at 2 p.m local time for a special shareholder meeting. With early support from large institutional investors and few calls for stockholders to block the deal, Compaq, based in Houston, will likely garner enough support to cement its decision to merge with HP.

HP claimed an early victory Tuesday against fervent acquisition opponents at its shareholder meeting. Preliminary vote counts show that HP eked out a win, said Carly Fiorina, chairman and chief executive officer at HP, during the Tuesday meeting.

Walter Hewlett, an HP board member and son of one of HP's founders, led the vocal media campaign against a merged HP/Compaq and rushed to counter Fiorina's pronouncement in a press conference after the vote. The Hewlett camp said the difference in preliminary vote results is less than 1 percent. This "razor thin" margin makes it impossible to declare an official victor before all the last-minute votes trickle in and ballots are double-checked.

IVS Associates Inc., a small firm based in Newark, Delaware, that specializes in tabulating vote results will announce the official outcome after pouring through ballots and shareholder information. A final tally from IVS could take weeks to arrive.

The Compaq shareholder meeting should be a more amicable event than the HP gathering that had investors booing Fiorina and awarding Hewlett a standing ovation.

Some large Compaq investors have voted against the deal, but no individual or organization has come out against the acquisition with the same fervor as HP dissenters. The majority of stockholders appear content with Compaq executives' claims that a merger with HP is in the investors' best interests.

If the acquisition is approved, Compaq's storage, fault tolerant server, services and low-end server businesses would play a prominent role in the new company.With these additions to HP, the merged company would rival IBM Corp., advocates claim.

If the deal closes, the combined company would lay off close to 15,000 workers.

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