Walter Hewlett argues against large computer mergers
NEW YORK, Jan 30 (Reuters) - Walter Hewlett, the son of the founder of computer and printing company Hewlett-Packard Co. (NYSE:HWP - news) who is trying to block its merger with Compaq Computer Corp. (NYSE:CPQ - news), on Wednesday argued that large computer mergers historically have not worked.
ADVERTISEMENT
Compaq's purchases of Digital Equipment Corp. and Tandem Computer and Burroughs Corp.'s combination with Sperry Corp. to form Unisys Corp. (NYSE:UIS - news) didn't benefit shareholders, Hewlett said in a report filed with the Securities and Exchange Commission called ``Large Computing Mergers Have Consistently Failed.''
``HP should be creating value and solving problems, not diluting value and creating more problems. HP can do better. Investors deserve it. Wall Street expects it,'' Hewlett said in a statement.
Walter Hewlett has about a 5 percent stake in HP and is a board member. In the past two months, he has been arguing against the merger in regulatory filings, press releases and advertisements, saying that the weak personal computer business will dilute the profits from HP's printing business.
Hewlett also said in the filing on Wednesday that HP is misleading investors when it cites ``successful'' technology mergers because the mergers it is talking about are on a much smaller scale, according to a statement.
HP wasn't immediately available for comment.
Hewlett and other family members, including the Packards, hold an 18 percent stake in the company and say they'll vote against it. The companies are due to hear in the next two days whether European regulators have given the merger their go ahead or if they'll pursue a longer investigation. |
