Hewlett Family Members and William R. Hewlett Revocable Trust To Vote Against
Hewlett-Packard/Compaq Merger
PALO ALTO, Calif., Nov. 6 /PRNewswire/ -- Walter B. Hewlett, Eleanor
Hewlett Gimon, Mary Hewlett Jaffe and The William R. Hewlett Revocable Trust
announced today that they intend to vote their shares of Hewlett-Packard
Company (NYSE: HWP) against the proposed merger of Hewlett-Packard and Compaq
Computer Corporation (NYSE: CPQ) if the transaction is brought before Hewlett-
Packard's stockholders for a vote. Mr. Hewlett also announced that he has
been informed by an independent committee of The William and Flora Hewlett
Foundation that the Foundation has reached a preliminary conclusion to vote
its Hewlett-Packard shares against the merger.
Walter B. Hewlett, Eleanor Hewlett Gimon and Mary Hewlett Jaffe are
children of Hewlett-Packard co-founder William R. Hewlett. Walter Hewlett is
a trustee of the William R. Hewlett Revocable Trust. That Trust, the Hewlett
Foundation and the family members together own more than 100 million shares of
Hewlett-Packard stock.
Mr. Hewlett stated, "After careful deliberation, consultation with my
financial advisor and consideration of developments since the announcement of
the merger, I have decided to vote against the transaction. I believe that
Hewlett-Packard can create greater value for stockholders as a stand-alone
company than as a company combined with Compaq. Hewlett-Packard has a strong
tradition of innovation and product development, a highly profitable printer
and imaging business, a strong foundation for expanding its outsourcing and
consulting services business and an extremely talented work force.
"I firmly believe that partnering with Compaq will not give
Hewlett-Packard what it needs most to create additional stockholder value --
expansion of its printer and imaging business as well as the higher-end
segments of its services and server businesses. The combination would
dramatically increase Hewlett-Packard's exposure to the unattractive PC
business and dilute current stockholders' interest in Hewlett-Packard's
profitable printer business. Given the lack of stockholder benefits, I believe
the extensive integration risks associated with this transaction are not worth
taking."
Mr. Hewlett noted:
-- acquiring Compaq would significantly increase Hewlett-Packard's
exposure to PCs -- an area that is neither growing nor profitable;
-- the merger would substantially dilute the current stockholders'
interest in Hewlett-Packard's profitable printer and imaging
business;
-- acquiring Compaq would expand Hewlett-Packard's exposure in the
lower-end server business -- an area that has been less profitable
for Hewlett-Packard than the higher-end segment of that business;
-- Compaq's services business, which is more focused on support than
outsourcing and consulting, is not the type of services business that
Hewlett-Packard should be seeking to grow;
-- the merger would distract Hewlett-Packard management and the rest of
the Hewlett-Packard employees from concentrating on areas in which
Hewlett-Packard excels and should be expanding;
-- the uncertainty created by the merger could cause existing and
potential customers to delay orders or to purchase products from
Hewlett-Packard's competitors, which could have a significant and
long-term adverse effect on revenues;
-- during the extensive and complex integration process, there is likely
to be significant disruption and uncertainty among Hewlett-Packard's
employees, which could lead to loss of extremely talented
individuals, loss of focus and ultimately loss of market share as a
result of a delay in the introduction of new and improved products;
and
-- since the announcement, the outlook for Compaq's business has
declined dramatically -- making the prospects for any benefits to
Hewlett-Packard from a combination even less likely.
Mr. Hewlett is being advised by Cooley Godward llp for legal counsel and
Friedman Fleischer & Lowe llc as financial advisor.
About Walter B. Hewlett
Walter B. Hewlett, an independent software developer, serves as Chairman
of The William and Flora Hewlett Foundation, where he has been a director
since its founding in 1966. Mr. Hewlett is also a trustee of the William R.
Hewlett Revocable Trust. He has served since 1987 on the Board of Directors
of Hewlett-Packard Company and since 1999 on the Board of Directors of Agilent
Technologies, Inc. He was elected to the Board of Overseers of Harvard
University in 1997. In 1994, Mr. Hewlett participated in the formation of
Vermont Telephone Company of Springfield, Vermont and currently serves as its
Chairman. He founded the Center for Computer Assisted Research in the
Humanities in 1984, and currently serves as a director of the Center. He also
serves on the boards of The Public Policy Institute of California and The
Packard Humanities Institute. Mr. Hewlett is the son of the late Hewlett-
Packard Company co-founder, William R. Hewlett.
SOURCE Walter B. Hewlett |
