ASCII Group Backs HP-Compaq Merger

ASCII Group Compaq Computer Hewlett-Packard

In a prepared statement, group chairman and CEO Alan Weinberger said the deal,expected to be a cliffhanger until HP shareholders vote next week to approve or reject it,would be good for investors.

"It is simply a good business decision. Combined, the new HP will have a VAR force in the small and medium-sized business sector second to none," Weinberger said in the statement.

"This market already is a very large and important one for both companies," Weinberger said. "These 'feet-on-the-street' partners provide hardware, software and services to the small-business market, and give a definite edge to manufacturers whose customers are left out in the cold by direct sellers whose only goal is to make the sale."

The proposed merger is being fought tooth and nail between the HP board of directors and Walter Hewlett, a dissident board member and son of one of the company's founders. Both sides have been publicly tallying support of key shareholders and independent analysts since last week.

"VARs control the brands that the majority of small and medium-sized business customers are purchasing," Weinberger said. "Compaq has an outstanding relationship with the VAR community and a comprehensive VAR infrastructure. In the merged company, HP will benefit from this relationship."

HP shareholders are scheduled to vote on the deal March 19. Compaq shareholders are slated to cast their votes on March 20.