4:40pm 03/05/02 ISS explains why it backs H-P/CPQ merger (HWP, CPQ) By Neil Chase
In its report advising clients to vote for the merger of Hewlett-Packard and Compaq, Institutional Shareholder Services offered this conclusion: "Based on our assessment of the strategic and financial prospects of the combined company and our analysis of the integration plan and other procedural aspects of the merger, we recommend that shareholders vote for the HP-Compaq combination. While Mr. Hewlett makes a credible case that the risks associated with the transaction are real and material, we believe that management's upside scenario is achievable. Indeed, we believe that Mr. Hewlett himself has helped press management to take steps, particularly on the integration front, that mitigate the risks of the transaction and thereby tip the balance in favor of supporting the transaction. Finally, while Mr. Hewlett's focus-and-execute alternative strategy is attractive, and justifiably so, in the short-term, we believe that the Compaq merger provides a better means of maximizing long-term value by exploiting the potential of all of HP's assets rather than just a single 'crown jewel.'" |
