Walter Hewlett files proxy against Compaq merger

SAN FRANCISCO: Hewlett-Packard Co. founding family member Walter Hewlett

filed on Thursday a preliminary proxy statement to solicit votes against the

proposed $22.3 billion acquisition of Compaq Computer Corp.

Hewlett, the son of HP co-founder Bill Hewlett and family member who has been

the most vocal in his opposition to Chief Executive Carly Fiorina's merger plan,

filed the widely expected statement outlining his opposition with the Securities

and Exchange Commission.

Hewlett-Packard has already filed its own preliminary proxy ahead of a

shareholder meeting on the largest merger ever in the computer industry.

Shareholders are expected to vote early next year, though not before late

February.

Hewlett detailed his analysis that the merger would dilute the value of

Hewlett-Packard's printing business while increasing the size of the barely

profitable -- or unprofitable -- personal computer division. Hewlett-Packard

recently countered Hewlett's previous arguments in a document buttressing its

case that the merger would build a services and high-end computing franchise

large enough to offer major customers almost everything they need.

"It looks like we've got a real (fight) on our hands," said Charles

Wolf, an analyst at Needham & Co. He said Hewlett's proxy was expected and

underlines the degree to which he opposed the deal that pits management against

the founders' children, who hold 18 per cent of Hewlett-Packard's stock.

"From an amusement perspective, this is just terrific," Wolf said.

Hewlett said MacKenzie Partners would solicit proxies on his behalf.

© Reuters Limited.