HP Director: 20 Top Investors Like Merger
But Ginn, Condit leave door open for exit if Compaq deal fails
By Edward F. Moltzen
CRN
New York - 3:19 PM EST Mon., Mar. 11, 2002
Two Hewlett-Packard board members left open the possibility they'll quit if shareholders reject the controversial merger with Compaq Computer during a March 19 vote.
One of those directors, Phil Condit, chairman and CEO of Boeing, also told analysts and reporters he counts about 20 top HP investors in their camp as supporting the $21 billion deal, which is opposed by fellow director Walter Hewlett.
"I care deeply about HP and its future and its success," director Sam Ginn, retired chairman of Vodafone AirTouch, said, during a conference call. "I can't tell you honestly that I've made a decision [to leave or stay on the board] either. I'm just going to have to see how this plays out.
"I understand our fiduciary responsibility," Ginn said. "I will try every way I can to live up to that. . . . A 'no' vote basically causes an inherent conflict in current board members. Board members will deal with that in their own, personal way. I can't predict how other board members will deal with that when I can't predict how I deal with that."
Condit said he, too, would not be able to answer any questions regarding conflict until after the merger is approved or rejected.
"I am very dedicated to the success of Hewlett-Packard," Condit said. "I will address that conflict in me if we get to that point. I just don't know."
Added Ginn: "When we say we have a fiduciary responsibility, what that suggests is we don't walk away and pout. If we decide to leave the board, we do it in a professional way. We make sure there is continuity there for our successor."
HP's board has been fighting tooth-and-nail with Hewlett since Hewlett publicly opposed the merger last November.
"Walter is intellectually honest," Ginn said. "I think on this particular question, he's wrong. I personally like him. He's an honorable person, but he's just wrong on this position."
Ginn and Condit both said that after reviewing all the strategic options available for HP's future, they still believe the Compaq merger its its best bet. Other options, such as Hewlett's suggestion of spinning off HP's printer and imaging business, do nothing to turn HP into a solutions company, they said.
Both the Hewlett and Packard families and their charitable foundations have voiced opposition to the merger of HP and Compaq.
Last week, both sides scored significant victories. Independent firm Institutional Shareholder Services publicized a study in which it endorsed the merger. However, CALpers, the public retirement system for California employees, last week said it would vote against the deal.
"There is clearly a pattern where retirement funds, charitable funds have tended to go that way," Condit said. "Their primary responsibility is preservation of capital. Those that are looking for growth and opportunity will see it another way." |
