About two weeks before the deadline on HP’s shareholder vote on the merger, analysts Institutional Shareholder Services (ISS) gave their blessing to the deal that would make Compaq and HP a single entity. The very next day HP placed two-page ads in major newspapers touting the outcome, and CEO Carly Fiorina appeared on CNBC to trump the ISS report to the individual shareholders as well. Analysts gave the merger no chance to survive without an ISS yes-vote, something the analysis firm routinely gives to management-backed merger proposals. The ISS ruling meant that about 3 percent of the outstanding shares got voted for the deal, since investment firm Barclays had turned over voting of their shares to ISS. Barclays CEO Patty Dunn also sits on the HP board of directors, and so turned over her investment firm’s voting to ISS, which put its decision in the hands of 32-year-old Ram Kumar. Critics of the ISS recommendation noted that the company’s advice won’t be followed by 100 percent of its institutional clients. The critics added that an HP director like Dunn who backs the merger would never risk such a large share of stock before being certain of the ISS recommendation. A week before the ISS report, HP officials were calling it “very important.”

The merger continues to draw the interest of the HP 3000 community, some of whom believe that the 3000 division might take back its decision to withdraw from the market if the merger fails. General manager Winston Prather of the division has the power to make such a reverse, deemed unlikely by those who have had close contact with the division’s top management. The makeup of HP’s top management, including those connected with the merger team, rides on the outcome of the shareholder vote. Dissident director Walter Hewlett has virtually called for Fiorina’s resignation should the merger fail. Such a result would send months of HP aspirations and planning back to square one, and dissolve an integration team built from of a wide array of HP managers.

Meanwhile, the spins and proxy cards continued to fly in weeks leading to the vote. Just a day after the ISS recommendation, the Wall Street Journal reported that HP asked the results from an independent survey of HP and Compaq customers be dropped — a survey that showed those customers plan to spend less with the merged companies than the customers would spend today doing business with the vendors individually. The WSJ story said that when HP challenged the methodology of the survey, Ziff Davis agreed to quash it. The results also showed that Dell and IBM would gain business from the customers surveyed. Such survey results might be the thinking behind the US Federal Trade Commission approval which HP got for its deal as we took our issue to press. The FTC officials ruled that a combined HP-Compaq would not “impair competition in any relevant market.” Since regulators approved the merger because it doesn’t give HP unfair advantage, the deal now rides on what shareholders believe. After news of the ISS recommendation, HP’s stock dropped 2 percent in trading. Both sides urged individual shareholders to vote on the matter, no matter how few shares those investors own.