HP, Compaq set March dates for shareholder showdowns

Wednesday, February 6th 2002, 12:00 am
By: News On 6

SAN JOSE, Calif. (AP) _ Hewlett-Packard Co. and Compaq Computer Corp. will ask shareholders to approve their historic and controversial $23 billion merger on consecutive days next month.

The dates were set in a final merger prospectus that was filed Tuesday with the Securities and Exchange Commission and will be sent to stockholders. The decision indicates the companies are reasonably confident government regulators will clear the deal.

Since opposition to the deal has been deep _ notably by Hewlett and Packard family interests with 18 percent of HP stock _ HP's stockholder vote March 19 in suburban Cupertino essentially will be a referendum on chairwoman Carly Fiorina and her strategy.

Fittingly, the merger already resembles a political campaign. Almost immediately after the companies' filing Tuesday, the deal's chief critic, HP board member Walter Hewlett, began mailing out his proxy materials to solicit votes against the Compaq acquisition.

``HP is a strong company. HP is not in crisis,'' Hewlett wrote in a letter to shareholders. ``Don't bet the company on the Compaq transaction. It would be a mistake to become the world's largest commodity computing company, more than doubling HP's exposure to the troubled PC business. That would be a crisis.''

HP and Compaq say merging will make them the leader in key technology segments, dramatically improve the end-to-end packages they can offer corporate customers and generate $2.5 billion in cost savings.

At HP's shareholder meeting, the deal will require the approval of a majority of all votes cast _ either in person or by mail. Yes votes from a majority of all Compaq shareholders would be needed for the deal to be sealed March 20 at a Houston hotel.

Only people who held HP and Compaq shares as of Jan. 28 will be allowed to vote.

The deal has been approved by European and Canadian regulators but is awaiting clearance from U.S. antitrust officials. The companies decided to set the dates for the stockholder votes so there would be no delay if the government approves the acquisition in the meantime, HP spokeswoman Rebeca Robboy said.