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Monday, 8 April, 2002, 11:58 GMT 12:58 UK
Next hurdle for HP-Compaq merger
Compaq and HP logos
A HP/Compaq merger would be the largest technology deal ever
Hewlett-Packard has asked a Delaware court to dismiss a lawsuit that could stop it buying its rival, Compaq Computers.

A hearing was held on Sunday to consider whether the lawsuit, filed by Hewlett-Packard board member Walter Hewlett, son of one of the company's founders, should be dismissed or go to trial.

Mr Hewlett alleges the company misled shareholders and influenced a vote on the merger by coercing major investor Deutsche Bank to vote for the deal.

The court says it will issue its ruling in the next few days. If it finds in favour of Walter Hewlett the trial will proceed on 23 April.

Hewlett-Packard has said it will not re-nominate Walter Hewlett to its board of directors.

'Confident of victory'

Hewlett-Packard executives say the merger is designed to create a technology giant capable of competing with bigger players in the market such as IBM.

But Mr Hewlett says the merger will affect the value of Hewlett Packard's printing franchise and place too much reliance on the slumping computer manufacturing industry.

The result of the shareholder vote on the merger - held on 19 March - has not been announced yet but Hewlett-Packard executives are said to be confident of victory.

Louise Kehoe of the Financial Times told the BBC's World Business Report there have been suggestions Walter Hewlett knows he hasn't won enough votes to stop the merger and has filed the lawsuit to try to undermine the voting process.

The results of the vote should be released within the next few weeks.

Louise Kehoe, the Financial Times
"Both sides were extremely aggressive in trying to get shareholders to vote in their favour"
See also:

02 Apr 02 | Business
Lawsuit disputes HP-Compaq merger
01 Apr 02 | Business
HP board ditches merger rebel
20 Mar 02 | Business
Compaq votes in favour of merger
19 Mar 02 | Business
Close vote on computer merger
18 Mar 02 | Business
HP and Compaq set for final showdown
07 Mar 02 | Business
US regulators clear HP-Compaq merger
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