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Fiorina claims narrow victory

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DQW Bureau
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Hewlett-Packard CEO Carly Fiorina claimed HP shareholders have narrowly approved the $20 billion purchase of Compaq Computer. But since the vote counting will continue to at least a week, opponent leader Walter Hewlett refused to concede defeat saying it was simply too early to make a conclusion on the outcome. "I feel like I really accomplished something. I'm optimistic because the result isn't known and the margin is extremely thin." 

Fiorina said her analysis showed the merger was approved by a margin of victory that was "slim but sufficient." According to some reports the vote is within 0.5 percent, or just 9 million shared of the company 1.8 billion shares. 

The vote came after a few more tough moments for Fiorina. First, HP employees controlling 2 percent of HP's shares through the company's pension fund, voted by a margin of more than 2:1 against the merger, a clear internal blow to HP management. 

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A group of Compaq's French unit awaited Fiorina outside the Flint Center in Cupertino where they loudly protested job cuts with placards declaring, "Carly's dream is a nightmare for workers." 

Then the tired-looking Fiorina had to endure a hostile audience at the final shareholders meeting where many booed the CEO when she took the stage to make one last plea for approval of the merger. Walter Hewlett, on the other hand received a standing ovation when he took the stage to present his arguments against the merger. 

Hewlett drew laughs when he joked that he was ready to go back to his old life as an "academic and a musician," the phrase HP used to belittle him in the nasty battle to undermine confidence in his financial calculations that the deal would hurt share value. 

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IVS Associates, the company that certifies the vote, is taking the ballots back to its base in Newark, Delaware, where it will count the votes, many by hand. Both sides will have a chance to challenge ballots for potential flaws like postmarks, date of submission and number of shares held. 

Hewlett said he was optimistic that shareholders had rejected the merger. "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," he said

HP shares dropped to $18.80 and could drop further if the merger is approved as many opposing the merger are expected to get out of the stock. HP's stock has fallen 20 percent since the deal was announced on 3 September 2001. After the vote, Fiorina and Hewlett both smoothed over their sharp differences, claiming separately that HP was not "in crisis" and that the company would return to the "HP way" of pulling together no matter what decision shareholders had given.

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