Election Section

Hewlett heir wonders if HP management will step down if Compaq deal fails

By Brian Bergstein The Associated Press
Wednesday December 19, 2001

SAN JOSE — The leading opponent of Hewlett-Packard’s plans to buy Compaq Computer Corp. is demanding that HP clarify reports that directors and top executives would step down if shareholders reject the $22 billion deal. 

In a letter filed Tuesday with the Securities and Exchange Commission, a lawyer for Walter Hewlett called such reported threats “shocking” and said they “raise serious questions about the directors’ compliance with their fiduciary duties.” 

“Although you previously discounted these reports in conversations with me, the threats no longer can be ignored,” Hewlett attorney Stephen Neal wrote to an HP attorney. 

“If the threats are true, then Hewlett-Packard must immediately provide detailed information to the shareholders and the market about which members of management and which directors will resign. ... If the threats are not true, then Hewlett-Packard must immediately correct the record.” 

Hewlett, a member of the HP board and the son of late co-founder William Hewlett, wants the matter clarified in fairness to the shareholders who would vote on the Compaq acquisition if it wins regulatory approval, a spokesman said. 

An HP spokeswoman did not immediately return a call seeking comment. 

Hewlett’s letter referred specifically to an interview published last week in The New York Times with Richard Hackborn, an HP board member and avid supporter of both the Compaq deal and chairwoman Carly Fiorina. 

Hackborn told the newspaper that if HP shareholders reject the deal, “they will have to get a board and a management” to fix HP’s problems. Unidentified sources have made similar comments in other news reports, according to the letter. 

HP shares dropped 26 cents, or 1.3 percent, to $20.50 on the New York Stock Exchange on Tuesday. Compaq fell 38 cents, or 4 percent, to $9.11. 

In an HP filing with the SEC earlier Tuesday, the company quoted Fiorina as telling a group of top company managers that she was “disappointed and sad” about the Hewlett and Packard families’ opposition to the Compaq acquisition. 

But she reiterated her belief that buying Compaq is the best way for HP to serve more large corporations’ technology needs and take more leadership positions in the industry. 

“We are absolutely convinced that while this company always has options,” she said, “we have chosen the best one.” 


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