Analysts said today that the only winners in yesterday's decision by a Delaware judge to let Walter Hewlett's lawsuit continue against Hewlett-Packard to block its merger with Compaq Computer are Dell Computer Corp., IBM Corp. and Sun Microsystems Inc. -- and anyone else who competes against the computer maker.
While the analysts said they agree that there might be merit to Hewlett's claims against the company his father co-founded, they also said they believe that Hewlett should let go and move on.
"It is kind of like it has turned into a soap opera at this point," said Laurie McCabe, an analyst at Boston-based Summit Strategies Inc. "His complaint may be valid, but it has reached the point where it looks like the 2000 presidential election. At some point, the Democrats had to let go, hanging chads and all."
Art Russell, an analyst at St. Louis-based Edward Jones, agreed. Like McCabe, Russell said that he originally opposed the merger and didn't think that it would be in the best interests of either company or their shareholders. But he noted that the time for protesting is probably over.
"It is in everyone's best interest to move on with life," Russell said. "The best course is to put everything aside and get back to work."
Dan Kusnetzky, an analyst at Framingham, Mass.-based IDC, said he believes that some people will be glad Hewlett will get his day in court and a chance to have the issues of vote-buying and coercion examined (see story). Among them are the CEOs of Dell, IBM and Sun.
CIOs as a rule are risk-averse people, Kusnetzky said. Having HP and Compaq's product lines up in the air isn't something they will like, though he's not sure how much of an impact that will have in the long run, he added. But remaining uncertainty about the deal allows IBM, Sun and Dell to make a grab for HP/Compaq business.
That sentiment is shared by Brett Miller, an analyst at St. Louis-based A.G. Edwards & Sons Inc. Anything that holds up the the integration of HP and Compaq only helps the pair's competitors.
"For eight months, senior management has had their eye off the ball," Miller said. "Anything that postpones [the merger] plays into Dell and IBM's business models."
While Miller said Hewlett's suit may have some merit, he characterized the whole proxy voting process as something akin to the "wild frontier."
"There aren't a whole lot of rules," Miller said. "It is vote early and often, and only the last vote counts. And HP was pushing with everything that they had."
He questioned whether at this point Hewlett still has the best interest of the company at heart. "At the end of the day ... what is the price that you pay for [punishing] Carly [Fiorina]?" Miller said.
Russell and McCabe both said Hewlett will fall short of punishing Fiorina, HP's chairwoman and CEO, in the long run. Russell also said that winning enough votes to achieve the merger, which he believes she will, and surviving Hewlett's suit, which he also believes she will do, will give Fiorina time to make the merger work.
McCabe said that she believes that Fiorina will actually come out of the fight with a reputation for being a battle-tested winner.