March 19 is d-day in HP-merger battle

CIOL Bureau
New Update

The stage has been set for a showdown between Walter Hewlett and HP CEO Carly

Fiorina as Hewlett-Packard announced it will ask its shareholders to approve the

$25 billion merger with Compaq on March 19.


Hewlett immediately began mailing out close to one million letters asking

shareholders to sign over their voting rights to him. Fiorina said she believes

HP has enough support to win the battle, to which Hewlett responded that Fiorina

was wrong in predicting she had more votes than opponents of the merger.

Industry analysts say it is not clear how shareholders intend to vote at this

point. Many will make up their mind at the last minute. Fiorina's optimism seems

based on the better-than-expected results that both HP and Compaq have achieved

in the past two quarters. Those would serve as indications that the management

of both companies are able to execute their business plan and will continue to

do so following the merger.

"I don't think it should come as a surprise to anyone that we are in

fact on plan," said Compaq spokesman Arch Currid. Hewlett, on the other

hand said the positive results only show HP does not need Compaq and should

pursue other less risky business opportunities. "HP is a strong company. HP

is not in crisis. Don't bet the company on the Compaq transaction. It would be a

mistake to become the world's largest commodity computing company, more than

doubling HP's exposure to the troubled PC business. That would be a crisis.''


NOTE: Below, find the pro and anti merger web sites as well as the complete

text of the letter to shareholders in which Hewlett is making his case against

the merger.

Pro-merger page:

Anti-merger page: