Several HP institutional shareholders who reviewed the ISS report, which recommended voting for the deal, said it doesn't push them any closer to making a decision.
"It seems to be a recapitulation of what both sides said...but not very convincing on the analysis side," said Jerome Dodson, president of Parnassus Investments, which owns 170,000 shares of HP, or less than a 1 percent stake. "It seems like they were on the fence as much as I am but came down on the other side of where I'm leaning. ISS offered no rigorous reasoning or insight into the reasons for their decision."
Parnassus' lackluster response comes as the hotly contested merger--a $22 billion deal that would mark the largest ever in the technology industry--approaches the March 19 HP shareholder vote that will decide its fate. The reaction is somewhat anticlimactic given the hype surrounding the decision by ISS, which advises roughly 23 percent of HP's institutional investors.
Dodson, who expects to make a final decision by Friday, said his firm held off on casting a final vote until the ISS's recommendation was released because it wanted to have as much information as possible before reaching a conclusion.
He said his current opposition centers on HP's potential integration problems with melding two computer giants. He said he's also concerned that the merger could dilute the value of HP's highly profitable printing and imaging business.
State Street is another investor that has yet to make up its mind on the mega-merger. The investment company's decision holds significant weight, given that it has a 2.4 percent stake in HP.
| "Before the ISS vote, I was giving the merger a 40 percent chance of success. Now I believe they are modestly above 50 percent." ="" class="t2">-Charles Wolf, Needham & Co. analyst |