Judge rules H-P, Compaq deal can go on

SAN JOSE, Calif. -- A Delaware judge on Tuesday cleared Hewlett-Packard Co. of allegations it acted improperly in the proxy fight over the acquisition of Compaq Computer Corp.

Former HP director Walter Hewlett, who had fought to stop the $18.4 billion deal, said he would not appeal the ruling, which likely paves the way for completion of the high-tech industry's biggest merger.

"I will therefore now do everything possible to support the successful implementation of HP's acquisition of Compaq and encourage others who have shared my views in the past several months to do the same," the HP heir said in a statement Tuesday night.

Judge William B. Chandler ruled that Hewlett failed to support his charges that HP bullied a big investor into supporting the acquisition and lied to investors about the progress of the merger plans.

"The evidence demonstrates that HP's statements concerning the merger were true, complete and made in good faith," wrote the Chancery Court judge, who presided over the three-day trial last week in Wilmington, Del.

Palo Alto-based HP and Houston-based Compaq have said they plan to begin working together May 7.

Chandler's ruling concluded another contentious chapter in Hewlett's fight to stop the acquisition. "Clearly we're gratified," HP spokeswoman Rebeca Robboy said. "We look forward to moving on."