Peter Henderson
SAN FRANCISCO: Hewlett-Packard Co. on Friday launched its most scathing
attack yet on dissident director Walter Hewlett and his opposition to the Compaq
Computer Corp. merger, calling him a "man who has no plan" for the
future of the company.
With less than a month until shareholders vote on the $21 billion merger and
the outcome far from clear, HP board members said Hewlett's proposals announced
this week amounted to a cobbled together, "now you see it, now you
don't" strategy.
The opponents traded accusations back-and-forth in a volley of statements
through the business day on Friday.
In its opening salvo, a letter to shareholders, HP said "You may have
read that Walter Hewlett has a 'plan' for HP. Or perhaps you read that he does
not have a plan. Maybe you read both, depending upon which day of the week it
was, or what Walter Hewlett thought was expedient to say at the time..."
HP continued on Friday: "So when Walter Hewlett tells you he has no plan
and then says he really has one, and then vehemently denies he has a plan and
then says he has a new plan -- all in a matter of two weeks -- only one thing is
entirely clear: this is a man who has no plan for the future of your company or
your investments in HP shares."
Hewlett said this week his alternative to the merger was a "focus and
execute" strategy aimed at expanding HP's printing and high-end services
division. However, he has been inconsistent in the terms he has used to describe
that vision, telling Reuters he had a strategy, not a plan, then in a later
statement referring to the "details of the plan."
'Unseemly campaign'
Hewlett responded with a brief statement defending his calculations that HP
would be worth $14 to $17 per share more without Compaq. "HP continues its
unseemly campaign to attack me rather than attempt to support the merits, or
lack thereof, of its proposed merger with Compaq," he said.
HP then shot back a release saying, "We don't understand how Walter
Hewlett could make such baseless claims." Hewlett closed the day with his
rebuttal, that investors would see through HP's "smokescreen".
Hewlett has been arguing against the merger in letters to shareholders and
newspaper ads, while Hewlett-Packard management has launched an equally
aggressive campaign of its own aimed at garnering support ahead of the March 19
shareholder vote on the Compaq merger.
Hewlett and his team have a $32 million war chest to oppose the merger and
have been taking out frequent ads in national newspapers. HP has advertised even
more often frequently.
Hewlett's ally, David Packard -- the two are sons of HP's legendary founders
-- cast suspicion on HP's claims of strong support in the ranks on Wednesday,
when he issued the results of a poll of HP employees in Corvallis, Oregon, in
which nearly two-thirds opposed the deal.
A December HP survey of approximately the same employees had shown about
three-quarters backed the deal. Hewlett has tried to keep the fight focused on
whether to approve the merger, while management has argued that investors needed
to be presented with a clear and preferable alternative in order to vote against
the deal.
Both sides have taken to referring to the other in condescending terms, while
calling for fewer personal attacks and deploring the soap opera in the business
press.
HP chief executive Carly Fiorina, who engineered the merger, has called
Hewlett's opposition to the deal "irresponsible." For his part,
Hewlett has made clear that if the deal is scrapped, Fiorina should be fired.