Hewlett-Packard Co Chief Executive Carly Fiorina declared victory Tuesday in her US$20.3 billion bid to acquire Compaq Computer Corp, and Compaq investors gathered in Houston to vote on the purchase yesterday.
Analysts expect Compaq holders to overwhelmingly approve the combination because no opposition has emerged there. Fiorina said Tuesday that a "slim, but sufficient" majority of the larger computer maker's investors voted in favor of the deal.
PHOTO: REUTERS
For his part, Walter Hewlett, the dissident HP board member and family heir who has been battling to block the deal, refused to admit defeat, saying the vote remains "too close to call."
PHOTO: AP
"We stand by our statement that the results of today's vote are too close to call ... it is simply impossible to determine the outcome of the vote at this time," he said.
Investors in Compaq, whose stock has dropped 40 percent in the past year, say they're hoping the transaction builds a bigger, better player in the competitive market to sell server computers and corporate services. Compaq has struggled on its own as personal-computer sales growth slowed and prices fell, one of the reasons Hewlett-Packard director Walter Hewlett started a proxy fight to block the combination.
"They're two giant companies in an industry that shifts dramatically in a very short time frame with significant competition," said Bruce Raabe, who oversees US$500 million as chief investment officer at Collins & Co, which voted yes with its Hewlett-Packard shares.
The high stakes have created a big challenge for Fiorina, as she tries to integrate the far-flung operations and mesh rival cultures into one company. While the purchase would double her company's sales force and plug gaps in the product line, she would need to manage 145,000 workers in 160 countries and still find ways to meet her target of US$2.5 billion in cost savings.
"That is a significant problem," said Daniel Szente, chief investment officer at McMorgan & Co, a unit of New York Life Insurance Co that manages more than US$25 billion and voted for the purchase. "When you look back, a lot of major tech deals haven't exactly had stellar performance."
Hewlett-Packard has about 1.94 billion shares outstanding, and the margin is about 10 million shares, or half a percentage point, according to a person close to Walter Hewlett. The difference may be as wide as 50 million shares, or 2.6 percentage points, said a person familiar with Hewlett-Packard.
The closeness of the Hewlett-Packard vote demonstrates a hurdle that will still be there, even if the deal is completed, investors said. Fiorina will have to overcome more than six months of acrimony and name-calling from the proxy fight and smooth things over with employees who had hoped for a different outcome.
At Hewlett-Packard's investor meeting yesterday, when Fiorina said employees favor the purchase, the audience booed.
"The biggest challenge is to get everybody working toward the merger and trying to forget the difficulties of the last couple months," said L. Roy Papp, whose L. Roy Papp & Associates owns 800,000 Hewlett-Packard shares and voted yes.
Fiorina said she and the 900 people on the integration team are working on final plans, including listing customers' new salespeople and details about how they'll interact with the company.
The computer makers plan "cultural workshops" to teach employees about how the other firm does business, such as when they use e-mail and when they prefer voicemail. "I'm hopeful we can put this contest behind us, find common ground and move forward," Fiorina said at a press conference Tuesday.
She plans to fire 15,000 people, starting six to nine months after the acquisition closes. Fiorina, who eliminated 5,700 positions in the year ended in October, has been criticized for not being sensitive to the company's culture of compassion as she cut costs.
A group of 15 members of the Compaq French Works Council union from Paris flew in to protest the acquisition at the Hewlett-Packard meeting Tuesday, complaining about the coming job cuts.
Still, all the fighting may help Fiorina in the end. Walter Hewlett says his campaign has forced Fiorina's team to put 500,000 hours into plotting the minute details of the integration, which could ease the transition.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique