Walter Hewlett said the results show that Hewlett-Packard is better off on its own as it tries to step up its challenge to International Business Machines Corp, the biggest seller of computer equipment and services, and No. 1 PC maker Dell Computer Corp.
`Trying to out-Dell Dell'
"Trying to out-Dell Dell, while at the same time trying to out-IBM IBM, is a strategy that will leave H-P doomed to be a leader in nothing," he said in a statement.
Fiorina said the computer maker is planning April 1 as the date the companies start operating as one. The transaction still must be approved by the US Federal Trade Commission. Last month, the European Commission granted the companies unconditional approval for their combination.
Fiorina says she's gaining in a campaign to sell investors on the purchase of Compaq over resistance from some of her largest shareholders.
"The level of support for this merger is growing and is more than sufficient to win a shareholder vote," Fiorina said last week at a Goldman, Sachs & Co conference, even as the holders of only 1 percent of the shares have publicly declared in her favor.
"A few weeks ago, you would have thought the merger was going to be called off," said Charles Mayer, whose Invesco Funds Group owns Hewlett-Packard shares and manages US$30 billion. "It seems the odds are back in favor that maybe it will get done."
Organic growth `won't work'
Walter Hewlett wants to build Hewlett-Packard's printer and services revenue without such a big acquisition and told the Wall Street Journal this week that Fiorina should quit if shareholders reject the acquisition.
Fiorina says that won't work. "Two decades of organic growth and tactical acquisitions were just not enough to get us where we needed to go," she said in an e-mail response to questions. "For too long, the imaging and printing business has accounted for too much of the profitability of our company."
Compaq shares are trading about 14 percent below the value of Hewlett-Packard's offer, compared with 37 percent in November. The decreasing gap indicates some investors expect the purchase is more likely to happen.
Alliance Capital Management Holding LP, the 15th largest investor with about 1 percent of the stock, has said it will support the purchase when shareholders vote March 19.
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