Call me a sicko but I'm back in. I am not sure how things will turn out but the confusion is really hurting the stock.
Hopefully MC is doing some spinning behind the scenes in case things don't go exactly per plan but I think CPQ will show some improvement in the next quarter or two. I see more commercials lately than I have in awhile.
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H-P/Compaq Merger Vote Seen Close, Down To Individuals
Updated: Monday, December 10, 2001 05:26 PM ET Printer-friendly version
NEW YORK (Dow Jones)--Apart from the Hewlett and Packard family foundations' vehement opposition to proposed Hewlett-Packard Co. (HP, news, msgs) and Compaq Computer Corp. (CPQ, news, msgs) merger, institutional investors aren't even hinting about how they plan to vote.
H-P's founders' families currently own around 18% of the technology giant and intend to vote against the merger in a shareholder vote expected in late February.
Friday's announcement that co-founder David Packard's foundation would vote its more than 10% stake against the deal may indicate that all but the shouting is over.
Spokesmen for dozens of institutions, each holders of tens of millions of shares of H-P, declined to comment to Dow Jones Newswires about the voting.
Nevertheless, there's at least one voice making the case the merger is a good idea and one that has at least a fair chance at winning the shareholder vote. Unfortunately for H-P, he doesn't have any position in the Palo Alto, Calif., computer giant.
Eric Stevenson, president of Axiom Capital Corp., contends that despite popular thinking, many institutional investors may vote for the merger when the time comes. And, Stevenson said he believes individual investors will support the deal and may carry the day for those in favor of the combination. Axiom is a corporate development services company in Phoenix that specializes in acquisitions and mergers.
Stevenson, in an interview with Dow Jones, reiterated comments he made during an interview Friday on a Houston's KTRH radio station. Stevenson said neither he nor his firm have a position in either company, but he is "considered quite an expert" in mergers and acquisitions.
"I really find it strange" that no other institutional investors have come out with views on the deal, he said.
Lacking insider knowledge of the deal or other proof, he said he finds it hard to believe that H-P and Compaq would sign an agreement to merge without at least running the deal by some of their larger institutional holders.
Mergers are "very emotional," Stevenson said, and he suspects that the bad press surrounding the deal, and souring the founders families, actually originates within H-P management itself.
"I have no foundation to support this as fact," he said, but people in general fear change, and "heads will roll," like they often do in other large mergers, as the newly combined companies eliminate management and other redundancies.
A spokeswoman for H-P couldn't immediately be reached for response. Walter Hewlett, chairman of the William & Flora Hewlett Foundation, which is voting its stake against the deal, is the son of the late co-founder and sits on H-P's board.
Arch Currid, Compaq spokesman, said he can't comment for H-P. He added that knows of no one in H-P's management or board who is against the deal, apart from Walter Hewlett himself. Compaq's management and board, as well as its employees and customers, give "full support" to the deal, he said.
However, as Stevenson sees it, H-P "is not your father's dot-matrix company," and many of its individual investors are "young, tech-saavy investors" who could see the deal as a good thing and vote in support of it.
On the other hand, individual shareholders typically aren't very "pro-active" investors, he said, and many simply throw their proxies away and not vote at all, which could seal the deal for the naysayers.
Stevenson said he thinks the merger makes very good sense, but the vote will likely be close, and he isn't willing to bet on the outcome. He did speculate the vote will be much closer than anticipated, noting Wall Street would be more shocked by a vote for the merger than against.
Most observers contend that if the merger is doomed, so will be H-P's beleaguered Chief Executive Carly Fiorina, who championed the deal.
Stevenson said it wouldn't be too shocking if Fiorina ultimately wins the war, and the companies pull off a merger, but she still becomes a casualty of the fierce battle likely rage for at least the next two months.
-By Maxwell Murphy, Dow Jones Newswires; 201-938-5173; maxwell.murphy@ dowjones.com DOW JONES NEWS 12-10-01 05:26 PM |
