HP Shares Rise, Compaq's Dip Ahead Of Institutional Investor Report

Hewlett-Packard Compaq Computer

The recommendation by ISS, a Rockville, Md.-based proxy firm, stands to carry much weight among institutional investors voting on the embattled merger agreement, industry analysts say. Though ISS clients aren't obligated to vote based on the ISS recommendation, analysts say it could be enough to scuttle the merger if ISS advises against the deal, or to push it through if ISS approves of the pact.

The HP shareholder vote on the merger is scheduled for March 19. HP said that 23 percent of its shareholders subscribe to ISS services.

Already, some 20 percent of HP's outstanding shares--including those controlled by Hewlett and Packard family trusts--are aligned against the merger.