HP Claims Compaq Merger Victory

It's all over but the waiting. Hewlett-Packard shareholders cast their votes Tuesday on the biggest acquisition in the history of the technology industry. While the company's management claimed victory by a "slim but sufficient" margin, a final official vote won't be known for two to four weeks.

HP chairwoman and chief executive Carly Fiorina said roughly an hour after the conclusion of a special shareholders meeting that the board of directors was confident "a decisive majority of shareholders" had voted in favor of the $22 billion acquisition of Houston-based Compaq. Their finding was based on a preliminary estimate of shareholders proxies by an independent election inspectorate, IVS Associates. "We've proven a kite rises against the wind, not with it," Fiorina told reporters during a news conference after the shareholders meeting.

Walter Hewlett, son of the Palo Alto, Calif., company's co-founder who has waged a bitter, public battle with Fiorina against the deal, responded in his own press conference that the result was too close to call. But he said he was optimistic the merger would be defeated. In a short statement during the morning meeting at De Anza College's Flint Center in Cupertino, Calif., Hewlett received a standing ovation from the vocal crowd of about 2,000 shareholders. He insisted HP is a strong company and isn't in crisis. "For many decades, HP has represented a unique vision of the best an American corporation can be. ... The HP way is not a relic of another time, and it's not a piece of trivia relevant to only Hewlett and Packard family members."

Fiorina, who conducted the meeting, essentially didn't say anything new but stuck to the script she has recited in the past six-and-a-half months since the merger was revealed. The deal is a unique opportunity to save $2.5 billion annually and advance the company's market position in the Windows NT server business, double the size of its services workforce, and make HP the leader in the storage, Unix, and Linux markets.

The dueling public statements and the scene outside the meeting continued the rich, soap opera-like pageant that has characterized this unprecedented proxy fight. Shareholders gathered outside the building as early as 6:15 a.m., accompanied by swarms of press, French trade-unionist protesters--HP employs about 5,000 people in France--and a lone drummer, clad in what appeared to be a green table cloth, the color of the "No" proxy vote card.

A retired 34-year employee of HP labs, who wished to remain anonymous, said after the meeting that he voted against the deal because of its ruinous effect on the company's tradition. The HP way has been "severely eroded," he said. It stood for integrity of leadership and their approachability--he once sat in with co-workers as they debated circuit designs with founder Bill Hewlett. "There was tremendous talent I could see as an engineer," he said. "Top management was very savvy technically. That concept is a dinosaur today."