Approval on HP-Compaq next week
Regulators set to OK $22B merger; ISS determination also next week.
February 28, 2002: 4:17 p.m. ET
|
NEW YORK (CNN/Money) - The Federal Trade Commission is set to approve Hewlett-Packard Co.'s $22-billion takeover of Compaq Computer Corp. early next week, a person familiar with the situation told CNN/Money.
The FTC's endorsement hinges on whether the regulators will require any adjustments made to the merger, the source said.
"We are 99 percent sure that [the FTC] is going to approve," the source said.
However, the FTC's review is only one of the hurdles the transaction must overcome. Institutional Shareholder Services, whose recommendation is critical to the merger, will also make its decision early next week.
Rockville, Md.-based ISS, which advises some 500 institutional clients, was hired by some shareholders to give an opinion on the HP-Compaq merger. Analysts have said HP's takeover of Compaq needs the approval of 67 percent of institutional stockholders.
Hewlett-Packard (HWP: up $0.09 to $20.12, Research, Estimates) shareholders are also set to vote on the takeover March 19 while Compaq (CPQ: down $0.06 to $10.14, Research, Estimates) shareholders will vote the next day.
European regulators cleared the merger in January without adjustments. The European Commission, the executive body of the European Union, said the deal does not raise competition concerns in Europe.
At that time, the FTC said it would observe the EC's treatment and likely adhere to the European regulators' judgment.
HP Chairman and CEO Carly Fiorina pitched the transaction to Wall Street Wednesday while lashing out at dissident Walter Hewlett, who is opposing the merger. The merger could result in a $450 million to $700 million restructuring charge and an additional $450 million to $700 million charge for purchase accounting and goodwill costs, Hewlett Chief Financial Officer Bob Wayman said.
Hewlett hinted Thursday that he might sell his holdings in HP if the merger went through, press reports said. Hewlett, son of one of the HP co-founders, has launched a bitter proxy battle to stop the $22 billion HP-Compaq merger.
HP, Compaq and the FTC declined to comment. 
|
| SPECIAL: |
|
|
|
|
|
|
