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Wells Fargo to vote against HP-Compaq merger

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CIOL Bureau
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SAN FRANCISCO: Hewlett-Packard Co. shareholder Wells Fargo & Co. said on Monday it would vote against the proposed merger with Compaq Computer Corp., since big technology mergers were tough to pull off and had mostly failed. Mary Trigg, a spokeswoman for the company, said Wells had discretion over fewer than 0.3 percent of HP shares.



"I think the bottom line as to why our proxy committee voted against it is that basically there is skepticism of mega tech mergers," said Trigg. The bank's logic closely followed the arguments of Walter Hewlett, the dissident HP board member and son of the company's founder who says the $22.5 billion deal, which would be the largest in the computer sector's history, would be tricky to pull off.



Hewlett also says the merger chiefly would enlarge HP's low-end personal computer business rather than the services and high-end computing portfolio that HP management says Compaq would contribute.



Analysts call the deal's chances in the March 19 and 20 votes by Hewlett and Compaq shareholders a toss-up. An influential analyst backed the deal last week, but a number of small investors have since publicly opposed it.



Thomson Financial/Sharewatch reported that Wells Fargo's Wells Capital Management holdings as of Dec. 31 included 7.1 million HP shares, or 0.37 percent.



(C) Reuters Ltd.

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