|
HP beseeches shareholders
|
 |
January 18, 2002: 7:08 p.m. ET
Computer maker's letter calls Compaq merger key to restoring leadership role.
|
NEW YORK (CNN/Money) - Hewlett-Packard Co. sent its first letter to shareholders in its attempt to sway them to vote for its $25 billion takeover of Compaq Corp.
Palo Alto, Calif.-based Hewlett-Packard (HWP: down $0.92 to $22.61, Research, Estimates) called its merger with Compaq (CPQ: down $0.28 to $11.52, Research, Estimates) "the single best way to reclaim a leadership role" in its industry.
HP is currently embroiled in a proxy war with Walter Hewlett, son of one of the co-founders. Earlier this week, Hewlett sent his own letters to shareholders to rally them against the merger; he also began meeting with institutional investors a month ago.
Hewlett, currently on a road show to meet with shareholders, said a merger with Compaq will significantly diminish the value of shareholder investment in HP on both a short-term and long-term basis.
HP, in its letter, addressed Hewlett's claims and called his presentation of the merger flawed and misleading. Hewlett is an academic and musician who, while serving on HP's board, has never worked at the company or its management.
"Mr. Hewlett is the only member of HP's board of directors who believes that resting on our legacy is better than building it," HP said.
HP said it expects costs savings merger to add $5-to-$9 of value to each HP share.
In early December, a key shareholder, the David and Lucille Packard Foundation, made a preliminary decision to vote against the merger. The Packard Foundation holds more than 10 percent of HP's shares. Other heirs of the founding Hewlett and Packard families also are opposed to the merger. Combined, the Packard Foundation and the heirs hold roughly 19 percent of HP's shares. 
|
|
|
|
|
|
|
