|
Hewlett in HP proxy fight
|
 |
January 23, 2002: 3:57 p.m. ET
David Packard takes out ad, says HP misappropriated father's words.
|
NEW YORK (CNN/Money) - Walter Hewlett continued his battle Wednesday to stop the $24 billion merger of Hewlett-Packard Co. with Compaq Corp., claiming HP is misleading shareholders.
Walter Hewlett said in a filing with the Securities and Exchange Commission that the merger will dilute HP stockholders' interest in the profitable imaging and printing business by one-third.
Hewlett said HP's analysis creates a false impression by taking credit for "hypothetical" savings in 2002 but ignores costs required to buy Compaq and restructure the business. The computer maker is also misleading shareholders by claiming that its merger with Compaq (CPQ: up $0.39 to $11.33, Research, Estimates) would create additional value of $5 to $9 a share, Hewlett said.
"HP's theoretical value calculation bears no resemblance to the real-world negative assessment made by the market," he said.
In fact, HP's stock price has lagged an index of comparable companies by more than $4 a share and HP shareholders have lost more than $8 billion relative to the index since September, Hewlett claims.
Hewlett, son of one of the HP co-founders, is currently on a roadshow to meet with shareholders and has previously stated that HP's merger with Compaq will significantly diminish the value of shareholders' investment in HP on both a short-term and long-term basis.
Separately, another child of an HP cofounder, David Packard, said in a
full-page ad in the Wall Street Journal that Hewlett-Packard is misusing his father's words. Packard said HP CEO Carly Fiorina misappropriated the words of his father: "To remain static is to lose ground."
David Packard, through the Packard Humanities Institute, controls a 1.3 percent stake in HP. Walter Hewlett controls more than 5 percent. Both are against the HP-Compaq merger.
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.
Hewlett's filing Wednesday counters claims made by HP in its first letter to shareholders that the company sent last week. At that time, HP called Hewlett's presentation of the merger "flawed and misleading."
Palo Alto, Calif.-based Hewlett-Packard (HWP: up $0.35 to $22.16, Research, Estimates) also characterized Hewlett as an academic and musician who, while serving on HP's board, has never worked at the company or its management. 
|
|
|
|
|
|
|
