Walter Hewlett Files Suit Against Hewlett-Packard

Walter Hewlett, the Hewlett-Packard director who led a five-month campaign against the company's planned merger with Compaq Computer Corp. (CPQ), said he filed a lawsuit Thursday questioning the solicitation of votes in favor of the combination.  

Hewlett, a dissident board member, son of a company founder and a staunch opponent of the merger, said the complaint was filed in the Delaware Chancery Court and that he has asked for expedited proceedings.

"The complaint raises issues about the process by which Hewlett-Packard (HWP) solicited votes for the approval of the proposed merger with Compaq," particularly from shareholder Deutsche Bank, Hewlett's statement said.

Shareholders in Palo Alto, California-based Hewlett-Packard on March 19 voted on the merger. After the vote, HP claimed victory and appeared to hold a lead of less than 1 percent of its stock, according to a source close to Hewlett, speaking on condition of anonymity.

But Walter Hewlett has said the vote is too close to call. It will take several weeks to determine the official result of what appeared to be the closest corporate election in years. Independent proxy counters must verify each vote, and each side can challenge whether the proper people signed certain ballots.

Reports soon emerged that Deutsche Asset Management, which had pledged its large block of shares against the deal, switched sides at the last minute and voted half of its holdings in favor of the merger after intense lobbying by HP.

Hewlett-Packard and Deutsche Asset Management, the unit of Deutsche Bank that holds the HP shares, weren't immediately available for comment.

Those on both sides of the deal had worked hard behind the scenes to make sure large investors' votes were nailed down or to persuade some HP shareholders to change their minds.

Hewlett-Packard Co. chief Carly Fiorina said after the vote that HP's proxy solicitor had assured her the company would have enough votes to win.

Reuters and the Associated Press contributed to this report.