HP claims Compaq merger victory, no official word

Reuters via Forbes.com ^ | 3/19/02

[GeneD]

CUPERTINO, Calif. (Reuters) - Hewlett-Packard Co. said Tuesday that preliminary estimates showed shareholders had approved its purchase of Compaq Computer Corp., a result unconfirmed by voting officials.

HP said its view is based on a preliminary estimate by its proxy solicitor. Voting officials are expected to take days or weeks to tally the ballots on the $21 billion merger that has been the subject of intense debate. HP shareholders met on Tuesday morning.

In a statement, Chief Executive Carly Fiorina described the merger as winning a "decisive majority" of shareholder votes. That differed from Walter Hewlett, the dissident shareholder, who said he was optimistic the vote had gone his way. One source in his camp described the vote as being "too close to call."

Compaq shareholders are expected on Wednesday to second the apparent decision to back the deal, catapulting HP into a race against International Business Machines Corp. for the title of No. 1 computer company.

Fiorina had staked her future on her belief that the computer industry was consolidating and customers were looking for one-stop-shopping technology powerhouses, while HP board member Walter Hewlett mounted a strong campaign to stop an alliance he said was a mistake that would distract the company when it most needed to focus.

Copyright 2002, Reuters News Service

[RightWhale]

Good luck, HP. This is crazy, you know.

[balrog666]

Bye-bye, Fiorina.

[Semper Paratus]

DEC ate Prime
Compaq ate DEC
HP will eat Compaq

Bon Appetite

[Common Tator]

There is the bull crap that bigger means better. If bigger meant better then New York would be better run then Greenville South Carolina... the streets would be safer, the city services better, the city cleaner....

But small towns are nearly all better managed than big towns. If Carley can't run HP's computer business successfully how can she run one twice as big. If you can't fly a piper cub, you sure as hell can't fly a 747.

H.P.'s problem is the same as Compaqs. It costs them too much to make a PC. Dell makes them better and cheaper. There is nothing that can be accomplished by puting two losers together that could not be accomplished apart. They have to figure out how to make them better and cheaper. At their size there are zero economies of scale. Infact there are increased exenses in scale.

What it means is HP paid billions to shut down Compaq or half of HP. Take you pick. She may be able to lose enough money to crash the print business two.

I watched Carley on TV today. She is one obnoxious person. From what I saw, I will never buy another HP anything. She has zero sales ability. And one thing I have leared in 35 years of busines is that if you can't sell you can't manage. She delighted in putting Hewlett down on national TV. A smart person never does that.

Who ever sells HP short is going to make a lot to money.

[js1138]

Please be wrong on this one.

[deadrock]

There is a rumor that HP is on IBM's menu.

[deadrock]

Compaq bought out Tandem. They also have the monster Alpha servers. HP have small/mid/monster sized servers as well. Workstations have a smaller role in the overall business plan.

[eno_]

A fatter target for Mike Dell, and a chance to see Fiorina do the corporate vampire thing to another once-great company.

[RightWhale]

Who ever sells HP short is going to make a lot to money

HP common stock is up from 30 six weeks ago to 40 now. Earnings per share are $.25 this quarter and estimated to be $2 per share by end of year. Lots of enthusiasm. Wait a couple days.

[theartfuldodger]

There is much more to either Compaq or HP than PCs. You and Hewlett have a selective and myopic view of what the merger is all about.

[skeeter]

She delighted in putting Hewlett down on national TV. A smart person never does that.

Especially when personally attacking the son of a venerated figure can do nothing but hurt your cause.

I hope Carly gets slam dunke today.

[Pistolshot]

HP got out of the home PC market because they could not compete with Compaq, DELL, and Gateway. Now, if this purchase goes through, HP will have an instant home PC market, mid-level server systems and High-end Alpha Server systems.
This does not include all the other markets HP covers, home electronics, handheld PC, and cellular.
Overall a good aquisition. It also creates a marrige with AMD and Intel to some degree. None of this is bad for the semiconductor industry.
Hewlitt's father was a man of vision who understood what he was creating, quality home electronics. Too bad his son wants to keep things the way they are and not develop a longer lasting future for the company.

[Pistolshot]

HP got out of the home PC market because they could not compete with Compaq, DELL, and Gateway. Now, if this purchase goes through, HP will have an instant home PC market, mid-level server systems and High-end Alpha Server systems.
This does not include all the other markets HP covers, home electronics, handheld PC, and cellular.
Overall a good aquisition. It also creates a marrige with AMD and Intel to some degree. None of this is bad for the semiconductor industry.
Hewlitt's father was a man of vision who understood what he was creating, quality home electronics. Too bad his son wants to keep things the way they are and not develop a longer lasting future for the company.

[Pistolshot]

Sorry for the double post.

[js1138]

I don't recall the old HP trying to be in the home market. Even their hand calculators were designed to appeal to the mathematically trained.

Scientific and medical instruments. Heavy duty printers. That kind of thing.

Anyone know the primary difference between HP ink-jet printers and everyone else's? And why they're different?

Hint: look at the ink cartridge.

[eno_]

Alpha is deadweight. The rest of the Digital legacy in Compaq is even deader weight. What's to like?

[pt17]

Alpha is deadweight. The rest of the Digital legacy in Compaq is even deader weight. What's to like?

Good question. The alpha chip was nearly dead meat when Digital was alive and and most vendors wouldn't port to it. Digital was a comatose mass when Compaq bought it. What exactly is HP getting? VAX customers?

[TheMole]

Agree with you about selling them short. I've done a mix of network administration, consulting, and courseware programming for about 15 years. I used to have a good opinion of HP products based on printers and scanners they made 5 to 15 years ago. More recent experience with HP PCs and 'all-in-one' units has shown that at least a goodly part of the company is functioning poorly, with products and support that are unacceptably bad. From what I can glean from news reports, there seems to be a major dose of political correctness in the executive branch of the corporation. They clearly have gotten away from focusing on making good products and providing good customer service - something I've learned to look out for whenever a company makes a big show of appointing women or 'minorities' to high positions. As far as merging with Compaq is concerned, why would combining two losers make a winner? Yes, I'd sell them short.

[Jack Black]

Having worked at companies in these massive layoff and acquisition scenarios I don't think things look at all good for HP if this goes through. The reports said lots of employees went to the shareholder meeting. One report said everyone talking identified themselves as employees or former employees. The deal is said to be going to cost HP 15,000 to 30,000 employees. Everyone with a brain is looking for a job. Those with an attitude are doing nothing else. They have presumably already identified and incented the best folks to stay through the transition. Their salaries are now locked in if they stay. The result of all this is a huge drop in productivity. The effects may not be seen this year, mostly sales productivity counts in the current year. But in '03 and '04 as the disgruntled employees (sure sounds like there is a lot of them) who didn't do any work for the 12 to 18 months send their next generation products to market the results will be seen. And they are already behind almost everyone.

One good move would be to gently show Carley the door. She is a magnet (as seen on other threads) for employee anger. Someone else would probably do much better if the deal goes through in making it work. But overall I think it's going to be a rough few years for this company. Shorting might not be a bad idea.