Directors assail foe of Compaq deal

6 HP

Critic's rival proposal won't work, they say

February 23, 2002|By BLOOMBERG NEWS

PALO ALTO, Calif. - Hewlett-Packard Co.'s six outside directors said yesterday that Walter B. Hewlett has no meaningful plan for the computer maker's future if it drops the proposed acquisition of rival Compaq Computer Corp. for $20.9 billion.

"All he continues to do is say `no' to the pending Compaq merger, but he offers nothing meaningful in its place," directors including Boeing Co.'s Chief Executive Officer Philip M. Condit and Barclays Global Investors' CEO Patricia C. Dunn said in a letter to shareholders.

Dissident board member Walter Hewlett, who is waging a proxy fight to block the purchase, says buying Compaq would make the company too reliant on low-profit personal computers. The son of co-founder William Hewlett this week outlined a plan to plug gaps in the company's server and computer-services lineup and said the board should consider spinning off the lucrative printer unit.

The rest of the board and Carleton S. "Carly" Fiorina, HP's chairman and chief executive officer, say the acquisition will bolster sales of services and server computers that dish up Web pages. In yesterday's letter, made public in a statement from the company, the outside directors said Hewlett's strategy won't work.

Hewlett-Packard shareholders will vote on the deal March 19.

The letter is a "desperate and unseemly attempt to distract stockholders" from the fact that his alternative could offer $14 to $17 more value per share, said Todd Glass, a spokesman for Walter Hewlett.

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