At least one huge tech deal WILL happen this week

July 31, 2008, 3:38 PM UTC

What with all of the hullabaloo about Friday’s meeting of Yahoo (YHOO) shareholders, it’s kind of amusing to note that a $14-billion tech-industry buyout will get approved by shareholders Thursday. That deal is getting far less ink than the deal that wasn’t, namely Microsoft’s (MSFT) purchase of Yahoo. No, the deal in question is Hewlett-Packard’s (HPQ) buyout of EDS (EDS). The target company holds its shareholder meeting Thursday in Plano, Texas, and the vote to approve HP’s takeover will be a formality.

HP and EDS have been quiet about their merger of less-than-equals since an initial spate of publicity when the deal was announced in May. The scuttlebutt is that EDS is an undermanaged mess and that HP CEO Mark Hurd can’t wait to get his hands under the hood.

It’ll be a good time for Hurd to get busy. He has enjoyed an extended run of clobbering HP archrival Dell (DELL), located elsewhere in EDS’s home state. However, if for no other reason than it’s been down so long, Dell recently has been closing the gap, at least in one measure I’m certain Hurd and his board follow closely: stock-market performance.  Over the last year, as this chart shows, laggard Dell has proved to be only a slightly-worse investment than HP, with the spread narrowing over time.

HP isn’t saying when the EDS deal will close, but it won’t be this week. In an announcement last Friday, HP said its purchase will not close before Aug. 18. The reason? EDS shareholders sued to be sure the company paid out its last dividend before HP gobbles it up and the dividend goes away. That’s kind of wonky stuff — until you consider that EDS’s 5-cent-per-share quarterly dividend costs $25 million. That’s a fraction of the transaction value, of course, but still not chump change considering that HP’s first task will be taking an ax to EDS’s expenses.