Workers Rejecting Deal, Hewlett Says
As the proxy fight over Hewlett-Packard Co.’s $21-billion bid for Compaq Computer Corp. went down to the wire Monday, deal opponents said HP employees were voting 2 to 1 against the acquisition.
Shares voted through the 401(k) plans of HP workers and workers at HP spinoff Agilent Technologies were due Friday and counted over the weekend, said a spokeswoman for dissident HP director Walter Hewlett, who is trying to stop the deal.
Of the more than 25 million shares voted, 16.7 million opposed the combination and 8.6 million favored it, according to Hewlett spokeswoman Joele Frank.
The margin in Agilent’s plan was even greater, at 8.1 million against and 1 million for, Frank said.
HP said workers also own shares directly and through an employee stock purchase plan.
“This is not a barometer of how employees will vote,” said HP spokeswoman Rebeca Robboy. “They are mischaracterizing what the overall employee vote will be.”
The final votes in the hotly contested fight will be cast this morning at an auditorium at De Anza College in Cupertino, Calif., not far from HP’s Palo Alto headquarters.
Investors can change their vote until that meeting ends.
There appeared to be some substance behind Hewlett’s claims of employee opposition.
Robboy said HP and Agilent employees hold 2% of HP’s 1.941 billion outstanding shares. The tally relayed by Hewlett totals almost 1.8% of the eligible shares, meaning that if both sides’ figures are correct, there would not be enough uncounted shares to swing the employee vote to HP.
“HP employees have consistently shown that they do not support this merger,” Hewlett said in a statement, citing earlier surveys.
“HP stockholders see through empty claims of being No. 1 in size without being No. 1 in profit and growth.”
Also on Monday, Hewlett picked up last-minute public support from the Teacher Retirement System of Texas, which had 0.3% of HP’s shares in December.
Robboy said the company still believes it has the support of a majority of the company’s biggest 20 holders. “We remain confident about a favorable outcome, and we look forward to the vote,” she said.
More than 23% of Hewlett-Packard shares are confirmed against the acquisition. That includes 18% owned by Hewlett, founder’s heir David Packard and trusts and foundations associated with them.
About 9% of the shares have declared public support.
In addition to concerns about the risks of integrating Compaq and its troubled personal computer business, HP employees have reason to worry about their jobs.
HP Chief Executive Carly Fiorina, who has led the campaign for the deal, has projected the elimination of 15,000 jobs if it goes through. As the proxy fight intensified, she suggested that massive layoffs might also be in store if the deal fails.
At today’s special stockholders’ meeting, Fiorina will give her last pitch to as many as 2,000 shareholders who will attend.
Hewlett also will be allowed to speak, Robboy said, and a question-and-answer session is expected.
Either or both sides may declare victory after the voting.
The final, certified results won’t be known for weeks.
HP shares rose 20 cents to $19.25 on Monday, while Compaq added 3 cents to $10.36, both on the New York Stock Exchange.
