HP/Compaq merger given the all clear

The way has been cleared for the Hewlett-Packard/Compaq merger after Walter Hewlett droped his legal challenge. The surprise announcement was made after a Delaware judge threw out his lawsuit opposing the $18.4 billon deal.

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By  Neil Denslow Published  May 1, 2002

The way has been cleared for the Hewlett-Packard/Compaq merger after Walter Hewlett droped his legal challenge. The surprise announcement was made after a Delaware judge threw out his lawsuit opposing the $18.4 billon deal.

After the result, Hewlett admitted that he was “disappointed” and he was expected to appeal. However, several hours later he said he would end the lawsuit and also stop the recount of the HP shareholders’ March 19 vote. The vote went narrowly in favour of the merger, 51.4% to 48.6%.

Hewlett, who was also kicked off the HP’s board last Friday, told the Financial Times that he would “continue to monitor the company’s performance to ensure that it acts in the best interests of all stockholders”.

In his suit, Hewlett had accused HP of misleading shareholders and of improperly coercing Deutsche Bank to vote in favour of the deal. However, the judge ruled that he had not met the burden of proof in either of the allegations.

The judge wrote in his ruling that “the evidence demonstrates that HP’s statements concerning the merger were true, complete and made in good faith.” He also added that Hewlett had failed to prove that Deutsche Bank had been coerced into agreement.

HP said that it was “gratified” by the court’s decision.

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