Again we ask: Will Walter Hewlett be chairman of Hewlett-Packard next week.
Chances are he will not, even if the Compaq merger is voted down. HP board
members will stay on until replacements will be found.
In what appears an amazing revolt among shareholders, the Compaq merger is
literally on the brink of failure, and with it the reign of Carly Fiorina.
More and more it seems those in the financial community who hold large blocks
of stock are voting against the merger which simply presents far more risk than
the investors are willing to stomach.
In the end, of course, investor vote their pocket books and none of the fancy
spreadsheet and financial projections Fiornia has produced in support of the
merger can overcome the odds against the chances Fiorina can pull of what no one
has ever down; merger two large high-tech companies in a way that increases the
overall shareholder equity.
And of course both HP and Compaq have terrible track records in the area of
mergers. Fiorina herself has seen a huge joint venture between Lucent and
Philips fail completely and utterly. With so little credibility on the table,
investors are simply voting to see the two companies continue their independent
ways.
Still, a victory for Walter Hewlett is far from certain. To date few of HP's
major institutional investors have come out in favor of the deal, whereas at
least four large investors controlling 4 percent of the company's stock have
said they are voting against the merger.
The key to a win for the opposition will be when the bulk of the institutional
investors decide to vote. If they decided just after last week's announcement by
ISS to support the deal, then the vote will be very close, and HP may even win.
If shareholders are holding out until the last moment, they are more likely to
vote against the merger because of the more recent announcements by Calpers and
Wells Fargo against the merger.
Any further announcements against the merger without any counter announcements
in support of the deal will probably indicate the merger is going the way of the
Titanic.