Strong Contingent Rallies To Vote Against HP-Compaq Merger

Hewlett-Packard Compaq Computer

An informal CRN poll of several dozen of the 1,000 HP shareholders lined up to attend the meeting at the Flint Center here, found the majority opposing the merger. The shareholders were lined up more than an hour before the meeting here on a chilly 40-degree morning. TV cameras and satellite vans loomed outside. HP expects from 2,500 to 5,000 shareholders to place their votes on the merger.

HP delayed the scheduled 11 a.m. EST start of the meeting to allow shareholders arriving from overflow parking lots on shuttle buses to get to the site.

Keith Butler, an engineer at Agilent who opposes the deal, came all the way from Wilmington, Del., to attend the meeting because he wanted to see how other shareholders are reacting to the proposed merger.

Butler, a 20-year HP shareholder, criticized HP management for not emphasizing the company's "engineering strengths" and instead focusing on "other business tactics to grow the company."

He added: "Engineering is what got them where they are and [HP Chairman and CEO Carly [Fiorina is forsaking that."

Butler praised HP board member Walter Hewlett for opposing the deal. "I am hoping it will be a landslide in Walter's favor, but it is too close to call," he said.

Steve Lund, who also works at Agilent, said he already sent in his green proxy card voting against the merger. "I am with the fleas," he said, commenting on a reported quote from someone within the HP camp that individual shareholders are fleas. "We're winning the elephants but we are getting eaten alive by the fleas," was the reported quote.

"[Fiorina doesn't represent the HP way," said Lund, who was wearing a baseball cap and tie-dye shirt. "She has blown $80 billion in shareholder value in the two years she has been here. It's time for new management." Lund said he believes the vote will be so close, "they will be counting chads for weeks."

Lund questioned the strategy of buying Compaq and going more deeply into the PC business. "I think Dell has that wrapped up," he said.

A former 10-year HP employee, who left the company 18 months ago and requested anonymity, said she is against the merger. "I know the history of HP's mergers in the past, and they have never worked. This one is just too big," she said.

Gary Gujral, who worked for HP for 27 years and retired two years ago, said he is voting for the merger. "It makes strategic sense. but there will be challenges in the integration of the two companies," he said.

If the merger is not approved, there will definitely be turmoil in the executive ranks, Gujral said.

A representative of the French Trade union, Confederation Francaise Democratique du Travail, which represents Compaq and HP employees in France, was outside the Flint Center protesting the deal with a placard and handing out leaflets that read: "Shareholders Beware: Megamergers Do Not Work."

The leaflet went on: "The nightmare of integrating HP and Compaq has been greatly underestimated. Do not support this risky and irresponsible management decision."

Jane Evans, an electrical engineer who worked at HP for 25 years before retiring, supports the merger, saying HP makes the "greatest products on the planet" and Compaq will make the company stronger. "It's a history-making day, and I hope we go for it," she said.

Marc Armand, a representative of the French Union and an engineer at Compaq in France, said he is attending the meeting to urge shareholders to vote against the deal. "We think this merger is bad for shareholders and employees in Europe," he said.

Armand sported a placard that read: "Fleas Are Stronger Than Elephants."

Another shareholder, who did not want to be identified, said he is characterized the deal as "two weak organizations being merged together. The emphasis is not upon the core technology or the core business. It just doesn't make good business sense. Compaq is a non-performer, so why buy it?"

LARRY HOOPER, ELIZABETH MONTALBANO and MARCIA SAVAGE contributed to this story.