- A "slim but sufficient" majority of Hewlett-Packard shareholders has approved the company's proposed $US21 billion acquisition of Compaq, according to HP chairwoman and CEO Carly Fiorina.
The results are preliminary and must be formally certified before legal closure of the deal can take place, Fiorina said. Official word on the vote isn't expected for "a few weeks," HP said in a statement. The decision will be revealed by Newark, Delaware-based independent vote-counting firm IVS Associates.
But based on early voting information, "we feel we have the approval necessary to go forward with this merger," Fiorina added.
Walter Hewlett, an HP board member, son of one of the co-founders and a key opponent of the acquisition, wasn't conceding after HP's announcement.
"We stand by our statement that the results of today's vote are too close to call. In a proxy contest this close, where stockholders are changing their votes right up until the closing of the polls, it is simply impossible to determine the outcome at this time. It is now in the hands of the independent inspectors of election, and we look forward to the certified results," he said in a statement.
Fiorina's claims came during a press conference barely an hour after a special shareholders meeting to vote on the merger concluded at the Flint Centre in Cupertino, California this morning.
Addressing the news media, Fiorina said that with the preliminary approval, HP will push forward in integrating the two companies.
A team of more than 900 people have been working on the integration for six-and-a-half months and are fully prepared to put those plans into motion, Fiorina said.
Shortly after the merger is formally approved, customers can expect to get full and detailed product road maps, Fiorina said. They will also be getting complete details on their account teams under a merged company, she said.
Plans are already in place to merge Compaq's websites with HP's, and customer service representatives of the merged organisation will soon be briefed on how to take calls from customers of either company, Fiorina said.
As previously announced, HP will lay off about 15,000 employees worldwide in the next six to nine months, Fiorina said. The layoffs will come from both HP and Compaq.
First announced in September, the deal would combine two of the largest computing companies into a services-driven vendor that proponents say would be better equipped to compete with IBM. Leading the charge was Fiorina, who was widely expected to resign if the merger were to fall through.
Compaq, meanwhile, said it was pleased with the outcome of the vote but acknowledged that the results weren't official.
"Over the past several months, there has been a groundswell of support from customers, partners and shareholders who are favorable toward the merger as they examine its strategic rationale," said Michael Capellas, Compaq chairman and CEO in a statement. "We continue to believe that this merger will rapidly accelerate our strategy, improve overall earnings power and provide increased value for customers, shareholders and employees. With the HP vote now behind us and the Compaq shareholder vote Wednesday, we are very close to making this merger a reality."
Earlier in the day, thousands of shareholders or their proxies attended the special meeting while several people, including a team of representatives from one of Europe's largest trade unions, stood outside the theater building protesting the deal.
The voting was preceded by a brief but impassioned plea against the merger by Walter Hewlett.
In his speech, which was interrupted several times by applause from shareholders, Hewlett once again expressed concern that the merger would result in layoffs and dilute much of HP's tradition and heritage without yielding sufficient benefits.
"HP has represented a vision of the best an American corporation can be," Hewlett said. "The HP way is not a relic of another time."
Fiorina meanwhile hammered away about the benefits of the merger while responding to a barrage of critical questions from skeptical shareholders.
For the most part, concerns relating to employee layoffs, integration challenges and long-term shareholder value dominated an hourlong question-and-answer session while the voting was being held.
The sentiments expressed by shareholders inside the hall echoed those of several protesters outside the building.
"I'm against the merger because it is a bad thing for employees," said Derek Lee, a representative from the Democratic Federation of French Workers, which had sent 12 of its members to protest the deal. It'll probably end up like the Compaq and Digital [Equipment Corporation] merger where thousands of people were laid off," he said.
"My primary concern relates to the quality of the board of directors and their ability to pull off a merger of this size," said Gary Masching, an HP shareholder who protested the merger.
Responding to such concerns, Fiorina said the merger with Compaq will make HP a $US7 billion storage business, a $US7 billion services business and the leader in the fault-tolerant computing and Windows-based server market.
Yves Rouchou, chairman of the board of ITUG, a Chicago-based Compaq user group that supports the merger, said today in a phone interview from Paris that he was happy to hear of Fiorina's early declaration of victory. "If it's going in a good way, it will be a good thing," he said of the vote.
Joe Pollizzi, president of Encompass US, another Chicago-based Compaq user group that backs the merger, called Fiorina's announcement "an encouraging sign."
"I am looking forward to what this combined company can do for us," he said. Yet despite Fiorina's declaration, Pollizzi said it may be best to wait until the final results are in before celebrating the certainty of a merger.
"I take this all with optimism, but also with a cautious grain [of salt]," he said.
Todd Weiss of Computerworld and Ashlee Vance and Matt Berger of the IDG News Service contributed to this report.