Hewlett-Packard's controversial plan to buy Compaq received a substantial boost when an influential investor advisory firm recommended that shareholders should support the deal.
Institutional Shareholder Services (ISS), an advisory firm which makes voting recommendations on corporate issues to fund managers backed H-P's under-fire chief executive Ms Carly Fiorina in her bid for Compaq.
The merger has been vehemently opposed by a number of major shareholders Mr Walter B Hewlett, the son of the company founder. The Hewlett and Packard heirs and the foundations they control have already said that they will vote their combined 18 per cent of shares against the Compaq merger.
The ISS report which was released after yesterday’s market close in the US, is important because 23 per cent of Hewlett- Packard's shareholders receive the firm's reports.
The report concludes that, "while Mr. Hewlett makes a credible case that the risks associated with the transaction are real and material, we believe that management's upside scenario is achievable."
Shareholders have until March 19th to vote on the merger.