HP Schedules Compaq Merger Vote For March 19

Hewlett-Packard Compaq Computer

Those owning HP shares at the close of business on Jan. 28, 2002, will be entitled to vote on the proposal, the company said. The Securities and Exchange Commission on Tuesday also put the registration statement for its final proxy into effect.

In an interview last Saturday, HP Chairman and CEO Carly Fiorina said she remains confident that shareholders will approve the deal.

"I think when we initially announced this merger, we expected a negative reaction. We didn't expect a proxy fight, but we did expect a negative reaction," Fiorina said. "Initially, people's reaction is to a set of generic statements: 'Big mergers don't work,' 'The PC business is a bad business.' We announced this [merger deal in September in the middle of a pretty down market, and a whole series of tragedies that occurred after that. It takes people time to cut through those generalizations and start to look at this particular opportunity and understand the compelling nature of [it. And when investors take a second look, they like what they see. We will get this done."

HP board member Walter Hewlett, who is leading the proxy fight against the merger, immediately issued a copy of a letter to HP shareholders opposing the merger.

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"Join us in voting against the merger of Hewlett-Packard with Compaq," the letter said. "We are convinced that this is a bad transaction for all HP stockholders."

Both the Hewlett and Packard families have said they will vote their 18 percent of HP's outstanding shares against the deal. As a result, industry analysts say, HP must win about two-thirds of the institutional shareholder votes for the $25 billion merger deal to prevail.

The HP special meeting of shareowners will be held at 8 a.m. PST on Tuesday, March 19, at the Flint Center, 21250 Stevens Creek Blvd., Cupertino, Calif.