Walter Hewlett Seeks to Maximize Value For HP Stockholders - Not the Stockholders of Sun, Dell and IBM
PALO ALTO, Calif., Feb. 20 /PRNewswire/ -- Walter B. Hewlett, on behalf of The William R. Hewlett Revocable Trust and its trustees, today issued the following statement that highlights how stockholders of Sun, Dell and IBM may benefit from the proposed merger of Hewlett-Packard (NYSE: HWP - news) and Compaq Computer Corporation (NYSE: CPQ - news):
Recent statements by competitors and industry analysts highlight the threat to HP as competitors are capitalizing on the distraction caused by the proposed merger with Compaq. Seemingly in denial, Ms. Fiorina claims that ``competitors are in a holding pattern,''(1) while those same competitors appear to be benefiting from the announcement of the proposed merger. HP's strategy should focus on creating competitive advantage and maximizing stockholder value, not creating opportunities for Sun, Dell and IBM.
Competitors say they are already benefiting from the distraction of the proposed merger.
Sun Chief Executive Scott McNealy quips that part of [his company's] plan
to cope with the recession is "just answer the phone calls from HP and
Compaq customers."(2)
Michael Dell, Chairman and CEO of Dell Computer Corporation said: "It's
just a delightful series of opportunities for us that emerge from this.
(HP and Compaq are) going to be doing a lot of things that have nothing
to do with adding value to customers, whereas we're going to be doing
things for ours."(3)
When asked if Dell has seen actual sales as a result of customer
confusion being caused by the proposed HP-Compaq merger, Kevin Rollins,
president and chief operating officer of Dell said, "We actually
have."(4)
"'If I was IBM, I'd be hoping the merger goes through ... It is in their
best interest ... if the HP-Compaq merger goes through the combined
company has a huge 'cultural conflict' issue that will be 'enormously
difficult' to overcome' says EDS Chief Information and Chief Technology
Officer Terry Milholland."(5)
"Sun is going to have a field day, so is IBM. You tell the customer if
you're doing high-end computing you need a company with a road map and
commitment ... Dell, too, will be looking for any weaknesses as HP and
Compaq seek to integrate their products," said Daniel Kunstler of J.P.
Morgan.(6)
A careful financial analysis of the economic impact of the merger and a
study of industry precedent transactions reveal the flaws in the proposed
merger with Compaq. Our analysis demonstrates that the financial effect
of this transaction will be negative for HP stockholders -- a loss of
more than $4.50 per share.(7)
HP's claim that "successful integration" of HP and Compaq will result in
only 4.9% revenue loss is, we believe, far too optimistic given past
results. Based on actual precedent transactions and research analyst
estimates, we believe that revenue loss of 10-12% is much more likely
should the two companies merge.(7)
So why on earth would HP stockholders vote for a merger that benefits
Sun, Dell and IBM?
They wouldn't and they shouldn't.
HP should focus on building on its competitive strengths and successful business execution. We believe this strategy, not an acquisition of Compaq, will maximize stockholder value.
We urge all HP stockholders to vote AGAINST the proposed transaction and sign, date and mail the GREEN proxy today. Please do not return any WHITE proxy cards.
Permission to use quotes neither sought nor obtained.
(1) Remarks by Carly Fiorina to attendees of the Goldman Sachs Technology
Conference, Palm Springs, California, February 4, 2002, as filed by
Hewlett-Packard pursuant to Rule 425 under the Securities Act of 1933
on February 7, 2002
(2) CNET News.com, December 19, 2001: Compaq lands big-budget deals
(3) Financial Times, Nov 26, 2001: Interview Michael Dell: PC company's
founder has his eye on 40% market share
(4) CNNfn, February 14, 2002: Money & Markets Interview with Kevin
Rollins
(5) CRN, February 11, 2002, HP-Compaq Combination Has Huge Cultural
Obstacles
(6) San Jose Mercury News, September 5, 2001: Acquisition would heat up
server battle, challenge IBM lead
(7) Based on assumptions outlined in a presentation prepared for and on
behalf of the Trustees of the William R. Hewlett Revocable Trust as
soliciting materials pursuant to Rule 14a-12 of The Securities
Exchange Act of 1934: HP is Misleading Stockholders: Financial
Analysis Illustrates that Compaq Merger Destroys Shareholder Value
Forward-Looking Statements and Assumptions
The views expressed in this release are judgments, which are subjective in nature and in certain cases forward-looking in nature. This release also contains estimates made without the benefit of actual measurement. Forward-looking statements and estimates by their nature involve risks, uncertainties and assumptions. Forward-looking statements and estimates are inherently speculative in nature and are not guarantees of actual measurements or of future developments. Actual measurements and future developments may and should be expected to differ materially from those expressed or implied by estimates and forward-looking statements. The information contained in this release does not purport to be an appraisal of any business or business unit or to necessarily reflect the prices at which any business or business unit or any securities actually may be bought or sold. For descriptions of the assumptions related to the forward-looking statements, see the presentation HP is Misleading Stockholders: Financial Analysis Illustrates that Compaq Merger Destroys Shareholder Value filed on January 23, 2002, with the Securities and Exchange Commission, pursuant to Rule 14a-12.
MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
proxy@mackenziepartners.com
(800) 322-2885 (toll-free)
(212) 929-5500 (call collect)
or visit
www.VoteNoHpCompaq.com
ATTENTION HP EMPLOYEES
It is important for all employees of HP to know that their vote is
confidential for all shares owned in the HP 401(k) plan. Strict
confidentiality is assured under the terms of the 401(k) plan and
applicable federal law. Therefore employees should feel free to vote
their 401(k) shares in their best interest without fear of intimidation
or reprisal.
ADDITIONAL IMPORTANT INFORMATION
On February 5, 2002, Walter B. Hewlett, Edwin E. van Bronkhorst and the William R. Hewlett Revocable Trust (collectively, the ``Filing Persons'') filed a definitive proxy statement with the Securities and Exchange Commission relating to the proposed merger involving Hewlett-Packard Company and Compaq Computer Corporation. The Filing Persons urge stockholders to read their definitive proxy statement because it contains important information. You may obtain a free copy of the Filing persons' definitive proxy statement and any other soliciting materials relating to the Filing Persons' solicitation on the Securities and Exchange Commission's website at www.sec.gov, on the Filing Persons' website at www.votenohpcompaq.com, or by contacting MacKenzie Partners, Inc. at 1-800-322-2885 or 1-212-929-5500, or by sending an email to proxy@mackenziepartners.com.
SOURCE: Walter B. Hewlett |
