Institutional Investors Say Packard Foundation Won't Sway Their Vote
Final proxy statement will be deciding factor
By Craig Zarley
CRN
Palo Alto, Calif. - 5:52 PM EST Mon., Dec. 10, 2001
The final proxy, not the Hewlett and Packard families thumbs-down vote, will have the most bearing on the outcome of the proposed merger between Hewlett-Packard and Compaq Computer, said institutional investors and their advisers.
"What [the Packard Foundation] does could be motivated by a variety of different reasons," said Richard Ferlauto, vice president at Institutional Shareholder Services (ISS), Rockville, Md., "It doesn't necessarily reflect other institutional shareholders at large. We provide an independent analysis based on what we think is best for institutional shareholders. Our recommendation will be pegged on the final proxy, and we're not even sure when that will come out."
ISS offers consulting services to institutional investors on the financial implications of proxy proposals. In some cases, institutional investors grant ISS the power to vote its shares based on its findings. But ISS recommendations weigh heavily on how institutional investors vote on the merger, financial analysts said.
Last Friday, the David and Lucile Packard Foundation, said it intends to vote against the HP-Compaq merger as it is now structured. The Packard Foundation is HP's largest shareholder with about a 10 percent stake.
Walter Hewlett, son of HP co-founder William Hewlett, also said he will vote his shares against the merger and is actively soliciting proxies against the merger. Walter Hewlett and the trust he represents control about 8 percent of HP's outstanding shares.
Ferlauto declined to reveal the number of institutional shares ISS has voting control over or the HP and Compaq institutional clients it represents. He said, however, that Walter Hewlett and his financial adviser have scheduled a meeting to plead their case with ISS. He added that ISS has also had contact with both HP and Compaq but has not yet scheduled a date to meet with company executives.
Meanwhile, other institutional investors said they too were waiting for the final proxy statement rather than following the lead of the Packard and Hewlett families in opposing the deal.
"I don't particularly care to have the children of founders influence me one way or the other as to what I think," said one large institutional HP shareholder who asked not to be identified. "I won't know how I'll vote until I study the final proxy."
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Copyright 2001 CMP Media LLC. |
