According to analysts and proxy-battle veterans, if the March 19 vote is close, it could be anywhere from a couple of days to a couple of weeks before the final result is known. Although companies often release results of uncontested votes right at the shareholder meeting, vote tallies in a proxy battle often take much longer.
"That's one of the many myths about a proxy contest," said Creig Dunlop, assistant vice president of IVS Associates, the Newark, Del.-based firm that has been hired by HP to serve as the independent inspector of elections. "It can take some time."
That's because in a proxy battle, shareowners can vote as many times as they want, with only their last vote counting. As a result, the inspector must make sure all the ballots for each shareholder are together and determine the order in which the proxies were cast.
In this case, HP is asking shareholders to send back white cards indicating support for the deal, while Walter Hewlett is asking shareholders to return green cards indicating opposition to the deal. Both sides have already mailed several sets of proxy cards to shareholders.
Such a process means that one or both sides could ask to look at the ballots themselves. Instead of looking for dimpled chads, the participants will want to examine earlier votes by shareholders to make sure it was the last vote that was counted.
By the same token, the outcome could be clear before the actual shareholder meeting. Both sides are already getting early returns, although most of the large institutional investors will wait until close to the March 19to cast their ballot.
The early returns come from two sources. Both sides are getting updates from their own proxy solicitation firms, which receive back shares from individual investors. At the same time, financial services giant Automatic Data Processing is collecting and tabulating proxies from institutional investors as well as Wall Street firms who hold shares on their own or on behalf of clients.
Although a final certified vote may take some time, it is possible that one side will declare victory at the time of the meeting. It is even conceivable that both sides could declare victory based on their assessment of the returns.
HP got the equivalent of a major newspaper endorsement Tuesday when proxy advisory firm Institutional Shareholder Servicesthat its clients, which make up around 23 percent of HP shareholders, vote in favor of the deal.
However, HP needs to overcome the opposition of Walter Hewlett, David Packard and several Packard and Hewlett foundations representing roughly 18 percent of HP shares. Institutions representing at least 3 percent of shares have also indicated they intend to oppose the deal, while those representing about 8 percent of shares have indicated support.
That leaves the majority of votes undecided, and it is not clear how much sway the ISS report will have.
Although there are early returns coming in, they are more akin to a poll than final votes, since they are subject to change. The returns that are coming in now are mostly from individual investors. Neither HP nor representatives of Walter Hewlett would comment on what their early returns are showing.
"You'll know early on if you are in trouble," Cornwell said. "Early returns define what you have to do and where the rest of your campaign has to go."
Cornwell said significant numbers of institutional votes are likely to roll in the day before the shareholder vote.
"The night before the meeting both sides will have a good indication of who won, unless it's really, really close--which could happen in this case," Cornwell said.
The merger battle has already taken on the ugliness of a political campaign with a host of negative ads, personal attacks and claims of momentum shifts.
As for the vote tabulator, IVS, they typically don't get involved until the day of the election, adding to the potential for the final result to drag on.
But unlike the folks in Florida, Dunlop said IVS' goal is to avoid taking center stage. Over the past 20 years, he said, his company has handled an average of about 20 proxy battles a year. However, the firm remains virtually unknown outside the insular world of shareholder battles.
He likens the company's ideal role to that of a good referee in a football game.
"The more in the background we are, the better off everyone is," Dunlop said.