New York Pension Fund Votes Thumbs Down On HP-Compaq Deal

New York Comptroller H. Carl McCall, who controls the second-largest state pension fund in the United States, the New York State Common Retirement Fund, said on cable news channel CNBC, "This would create a bigger company, but not necessarily a better and more profitable company."

He also said the fund would vote its 6 million Compaq shares against the $21 billion deal.

The fund's HP stake is only about 0.36 percent of that company's outstanding shares, according to Thomson Financial's ShareWatch. But every vote could be crucial in the bitterly contested proxy fight that analysts are calling a toss-up.

Thursday, Banc One Investment Advisors said it would support the merger, throwing its 0.26 percent of HP stock behind management in the hotly contested deal.

HP shareholders are due to vote on Tuesday, and analysts say the contest is a tossup.

A spokeswoman said that Banc One would also throw its Compaq shares behind the deal, which would be the largest computer merger ever and which management says would serve customers' nearly every need.

Banc One held 5.1 million shares of HP, 0.26 percent of those outstanding, and 1.8 million shares of Compaq, about 0.11 percent of that firm, as of Dec. 31, 2001.

But, dissident HP board member Walter Hewlett, who says HP would trade a piece of its valuable printing franchise for Compaq's low-profit PC business, had garnered a few allies earlier on Thursday.

The California State Teachers' Retirement System and the Public Employees Retirement System of Ohio said Thursday they opposed the buyout plan. Ohio PERS owns 4.1 million HP shares and 4.3 million Compaq shares representing 0.2 percent of HP and 0.25 percent of Compaq shares.

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