Hewlett-Packard Co. once again defended its plans to acquire Compaq Computer Corp., filing papers with the U.S. Securities and Exchange Commission (SEC) Friday in response to the latest move in a proxy battle being waged by an heir of the company’s cofounder.
Walter Hewlett, who has warned of his intentions to fight the proposed deal, filed a formal proxy statement with the SEC Thursday. If approved, Hewlett can distribute to shareholders the proxy statement along with a card they can use to cast a vote against the merger, once valued at as much as $25 billion.
Hewlett, who is the son of HP cofounder William Hewlett and a member of the company’s board of directors, has opposed the merger. So have family members of cofounder David Packard and the boards of various family trusts. They say that merging the two computing giants would destroy the value of HP’s shares and bury the company in the waning PC market.
Responding to the latest opposition, HP rebutted that criticism in a formal filing. “Based on comprehensive business and market analysis, we are convinced the merger with Compaq offers the best way to provide value to all of our shareowners,” the company wrote in the filing. “The merger will accelerate our strategic transformation by years by bolstering all of our businesses, including enterprise computing, PCs, IT services and printing and imaging.”
Executives from HP, including most of its board of directors, have continually argued that the merger will keep the company moving forward. In the filing, the company quoted David Packard’s famed words about the need for change: “To remain static is to lose ground.”
Shareholders are expected to vote on the merger at a meeting in early 2002, though no date has been set yet.