PALO ALTO, Calif.—Walter Hewlett, a board member of Hewlett-Packard Co., filed a letter with the Securities and Exchange Commission warning of “enormous unhappiness” about the proposed merger between HP and Compaq Computer Corp.
“I think that it is critically important to bring to your attention what I have learned from my conversations with shareholders and analysts,” Hewlett wrote. “There is enormous unhappiness about this transaction. This unhappiness goes far beyond those shareholders and analysts that have spoken out publicly. … The handwriting is on the wall and it is clear. If the merger is brought forward for a vote, there is a very high probability that it will be defeated.”
The move spurred Richard A. Hackborn, an HP director, to resign from The Hewlett Foundation’s board of directors
“Walter Hewlett’s decision to wage an ill-advised proxy fight opposing HP’s merger with Compaq deeply conflicts with my and the HP Board’s belief that the merger represents the very best way to deliver the value and growth HP’s shareowners, customers, and employees deserve,” Hackborn said.
Compaq issued a statement arguing against Hewlett’s views.
“We continue to believe that the combination of HP and Compaq will provide better market coverage, significant synergies and higher profits than either company would achieve on its own,” the company said.
Carleton S. Fiorina, HP’s chairman and chief executive officer, echoed Compaq’s sentiment.
“Despite the decision by the Packard Foundation and the earlier actions by Walter Hewlett and David Woodley Packard, we intend to stay the course and pursue a successful shareowner vote,” Fiorina wrote in a statement.
