Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Captain Jack who wrote (96037)	3/13/2002 2:26:43 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Walter Hewlett Says Fiorina's Days Numbered Wed Mar 13, 1:45 PM ET Lisa Gill, www.NewsFactor.com The all-out battle between Hewlett-Packard (HP) (NYSE: HWP - news) and dissident board member Walter Hewlett grew more acrimonious this week as Hewlett held a conference call with investors to outline his opposition to the company's proposed US$22 billion merger with Compaq (NYSE: CPQ - news). At the same time, HP released a stern statement demanding proof of Hewlett's claims. With less than a week to go until the scheduled HP shareholder vote on March 19th, both sides in the debate over the proposed merger have fired up their opposition -- or support -- for the deal by yet another notch. Hewlett Speaks Out Hewlett told analysts and shareholders in a conference call on Tuesday that the company's plan to offer end-to-end computing solutions would lead to a lack of focus, which has been the downfall of "many conglomerates." "HP can't out-Dell Dell (Nasdaq: DELL - news) and out-IBM IBM (NYSE: IBM - news) at the same time," Hewlett warned. Hewlett also predicted that HP CEO Carly Fiorina's days would be numbered if the merger were voted down -- but he added that he would serve on the search committee for a new CEO. "This will be her second aborted merger in less than two years, and [she] won't have the credibility to lead the company," Hewlett said. "I believe we will look for a current CEO with a track record for creating shareholder value and not get a CEO who again is learning on the job," he added. High-Risk Situation Roger Kay, director of client computing at research firm IDC, told NewsFactor in an interview that investors, analysts and onlookers can expect the mudslinging to continue, especially as individual companies stand up to announce how they plan to vote. "I think you'll see a lot more arguing back and forth. No one is going to go quietly," Kay said. While Kay noted that he expects the merger will go through, he said he believes Hewlett-Packard has created a situation from which it cannot escape. "There's real feeling that management has dragged everyone else along by creating a high-risk situation in which other people can't become dissident," he explained. Lost Momentum "If it doesn't go through, Compaq is in real trouble. And Hewlett-Packard has lost a huge amount of momentum and has nothing to show for it," Kay added. So far, Brandes Investment Partners and several huge pension funds, including California's huge CALPERS, have publicly stated their opposition to the merger. But Hewlett-Packard got a boost last week when the influential Institutional Shareholder Services (ISS), which is expected to sway the votes of institutions that own the stock, reported it favored the deal. HP Demands Answers In the meantime, Hewlett-Packard called on Walter Hewlett to answer questions, including how the company could double its margins to between US$14 and $17 per share without merger-driven cost savings, as Hewlett has forecast. The company also questioned how it could restructure its PC business for profitability, as Hewlett has suggested, and why it should spin off its imaging and printing business, as Hewlett also has recommended. But the company saved its most stinging points for last. Hewlett-Packard asked Hewlett how he could assure shareholders that the company's board members would not leave their posts if the merger were unsuccessful. The company also questioned whether Hewlett has met with former HP CEO Lew Platt to discuss Platt's reassuming the CEO position. "What, specifically, did you offer Mr. Platt? On what authority did you have these discussions? Have you discussed this plan in private meetings with HP shareowners?" the company asked.