HP spent $150 m to fight merger opposition

Hewlett-Packard spent a whopping $150 million to battle the opposition to the

Compaq merger, five times the amount spent by HP board member Walter Hewlett.

Investors gasps when Hewlett told members of the Council of Institutional

Investors, a group of large pension fund managers, that the firm had spent such

an exorbitant amount of shareholder equity to defend the merger. ''We're still

trying to determine how much of the shareholders' money HP executives spent

campaigning for this vote. Our best estimate at present is $150 million,''

Hewlett said.

At HP, officials said the amount stated by Hewlett was exaggerated. But the

company refused to put a price tag on the battle. HP has claimed it won the

shareholder vote. But the ballots are still being tallied and results may not be

announced for another week or even two.

The claim from Hewlett casts new doubt on one of the great promises of the

merger in which the combined company hopes to save some $2.5 billion in

operational expenses by firing some 15,000 workers. In addition to the merger

battle costs, HP is spending as much as $1 billion on integrating the two

companies a project spearheaded by an organization that has some 900 employees.

When all is said and done, the savings are at best minimal and not worth the

enormous acrimony the two companies are bringing upon themselves by trying to

combine two such vast organizations.