Reactions Mixed On Merger

During a general session at last week's conference, held here, a crowd of about 600 was asked whether they support the merger. In a show of hands, a clear majority voted yes. But when asked whether they thought the merger was a good idea, only four people raised their hands.

"Short term, it will be a disaster [if the merger wins shareholder approval," said Don Richie, president of Sequel Data Systems, a solution provider in Austin, Texas. "Long term, it could be a good thing. But we took a horrible beating during Compaq's [Digital Equipment Corp. integration, and I fear the same thing will happen again," he said.

Glen Jodoin, vice president of operations at GreenPages, a solution provider in Kittery, Maine, said the prolonged uncertainty "is killing our quarter in certain products for Compaq and HP. Both companies are good partners of mine, and I'm just glad it's going to be over."

Meanwhile, Steve Israel, executive vice president of AMC, a New York-based solution provider, said, "I hope it does not go through. I have enough difficulty dealing with them both now because they insist on taking business direct in New York."

Israel said he fears the situation will get worse if the companies merge because of uncertainty over who will control major accounts in New York. He pegged the merger vote as a toss-up.

"I think the merger will go through. It will adversely affect us because they are both our partners. Instead of having two options, we'll only have one," said Frank Mogavero, chairman of Data Systems Worldwide, a solution provider in Woodland Hills, Calif.

The merger vote is scheduled to take place March 19 in Cupertino, Calif. Last week, as the proxy fight between HP management and dissident shareholder Walter Hewlett entered the homestretch, Hewlett said HP Chairman and CEO Carly Fiorina should step down if the merger fails.

"I don't believe Carly Fiorina will survive as CEO if this merger is voted down," Hewlett said in a conference call with analysts. "She has made this vote a referendum of herself. .

. . If this merger is defeated, I don't think she would have the credibility needed to lead this company."

Conversely, a report in favor of the merger from Institutional Shareholder Services said, "Mr. Hewlett is unlikely to be renominated for election to the [HP board should he lose this contest."

Steven Burke and Edward F. Moltzen contributed to this story.