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Mon, Mar 04, 2002 - Page 21 News List

H-P says plan to replace Carly Fiorina an outrage

BLOOMBERG , PALO ALTO, CALIFORNIA

Hewlett-Packard Co, the second-biggest computer maker, said director Walter Hewlett's move to replace Chief Executive Officer Carly Fiorina in a dispute over the planned purchase of Compaq Computer Corp "lacks integrity and reflects desperation."

Walter Hewlett's plan to recruit former H-P CEO Lew Platt as a replacement for Fiorina, reported in the Financial Times Friday, is an "outrage and blatant disregard" of a directors responsibilities, H-P said in a statement.

"Walter Hewlett obviously intends to mislead and distract shareowners by raising this issue," the company said in the statement.

Todd Glass, a spokesman for Walter Hewlett, said the director intends to discuss possible candidates for interim CEO with H-P's board after shareholders vote on the transaction the month. He declined to comment on whether Hewlett has met with Platt on the subject. H-P spokeswoman Judy Radlinsky said the company had no further comment. Platt served as CEO at H-P from 1992 to 1999.

H-P said last September it will buy Compaq for US$21.9 billion to boost sales of server computers and services.

Walter Hewlett has criticized the purchase price, saying H-P stockholders are paying 48 times Compaq's 2002 earnings.

H-P has said the acquisition is the least expensive of the 10 largest high-technology mergers when ranked on a price-to-revenue and price-to-book value basis.

Investors have said that they're concerned that Palo Alto, California-based H-P may be left in disarray if the acquisition fails because Fiorina and other managers may leave the company. Hewlett, the only director to oppose the purchase, has previously said Fiorina should leave if shareholders don't approve the acquisition in a March 19 vote.

So far, shareholders representing about 19 percent of Hewlett- Packard's stock have said they'll oppose the plan to buy Houston-based Compaq. The families of the computer maker's co-founders, led by director Hewlett, control 18 percent of the shares.

Investors with 2.7 percent of the stock have said they support the purchase. Institutional Shareholders Services, the biggest proxy adviser, said it will issue a recommendation on the purchase on Tuesday, two weeks before a March 19 shareholder vote on the plan.

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