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To: Elwood P. Dowd who wrote (94206)	12/12/2001 7:26:49 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Packard Trust Stands Firm Against Merger By Peter Henderson SAN FRANCISCO (Reuters) - The Packard family foundation is unlikely to change its decision to reject Hewlett-Packard Co.'s (NYSE:HWP - news) proposed acquisition of Compaq Computer Corp. (NYSE:CPQ - news), a foundation official said on Wednesday. The comment deals a further blow to the acquisition pushed by HP chief Carly Fiorina. However, the David and Lucile Packard Foundation said it would not openly fight the merger or share a report on the deal it commissioned from consultants Booz-Allen & Hamilton, foundation President Richard Schlosberg said in a telephone interview. Hewlett-Packard has said it still hoped to win over the Packard foundation, HP's largest shareholder, and the foundation had encouraged that view by referring to its decision as ``preliminary.'' ''I would not over read that,'' Schlosberg said. ``It meant because the vote wasn't scheduled then, that we weren't casting our ballot, so it was preliminary. But we don't have any real expectation to change.'' The dozen board members of the foundation voted unanimously against the deal, he said. By throwing its 10.4 percent of HP stock against the merger, the foundation united the Hewlett and Packard heirs into an 18 percent opposition block. Some analysts now estimate the chances that Fiorina will be able to save the merger at much less than 50 percent. HP and Compaq have said since they will concentrate on winning support among institutional shareholders -- many of whom have been skeptical of the merger, so far. Schlosberg said Booz-Allen had finished a report on the merger plan in time for a Friday board meeting, but he declined to discuss it and said the foundation would not distribute it. ``We expect it to remain private,'' he said. Some merger opponents have said they hoped the report by the respected consultant could be used against the deal. But Schlosberg said the foundation would not attempt to persuade other shareholders and would not join Walter Hewlett -- an HP board member and son of founder Bill Hewlett -- who has promised to fight management. ``If another institution wanted to talk to us, have a conversation with us about those things, we'd certainly be happy to have that conversation, but we are not going to be involved in the campaign,'' Schlosberg said. ``We made our decision based on what we believe is in the best interests of the foundation, and that doesn't really imply anything about how another shareholder may look at that, frankly,'' he said. Some merger supporters have suggested that the charitable goals of the Packard foundation, which has seen the value of its endowment plummet along with the value of HP stock, led it to avoid an investment risk that other technology fund managers would consider. The foundation's board chairwoman, Susan Packard Orr, said in a Friday statement announcing the decision that the board ''understands the strategic considerations being addressed by management''. Email this story - View most popular \| Printer-friendly