In a move that may signal a proxy fight over the proposed merger between Hewlett-Packard Co. (HP) and Compaq Computer Corp., Walter B. Hewlett, an HP board member and the son of HP co-founder William Hewlett, has hired proxy solicitation advisors MacKenzie Partners Inc., according to published reports.
Walter B. Hewlett could not be immediately reached for comment, though his spokeswoman was quoted in the press as saying he hired the firm to preserve his options.
On Nov. 6, Hewlett announced that he and his sisters Eleanor Hewlett Gimon and Mary Hewlett Jaffe, as well as the William R. Hewlett Revocable Trust and the William and Flora Hewlett Foundation would all vote against the merger. The day after that, David Packard Jr., son of HP's other co-founder, indicated that he too intends to join the Hewlett family in opposing the merger.
HP announced in early September that it had agreed to acquire rival Compaq in a stock swap based on the companies' share prices at the time. The merger was estimated to be worth US$25 billion at the time it was announced, though share values have since declined, losing about $4.5 billion of its value as of today. Compaq and HP are aiming to finalize the merger in the first half of 2002, following regulatory approval, but the growing dissent against the deal may scuttle such plans.
HP announced on Nov. 7 that its full board, with the glaring exception of Walter Hewlett, voted to support the deal, adding that a proxy statement will be filed "shortly" by the HP board for the review of shareholders. Walter B. Hewlett has argued that HP should remain a stand-alone company and that a merger between HP and Compaq would steer HP away from its solid printing and services base and towards a far less profitable focus on the PC and lower-end server markets.
Founded in January 1990, MacKenzie Partners is a proxy solicitation/financial relations consulting company specializing in mergers and acquisitions-related transactions with particular experience in corporate control contests such as proxy fights, tender offers and consent solicitations, according to the company's Web site.
Together, the heirs of William Hewlett, the William R. Hewlett Revocable Trust and the William and Flora Hewlett Foundation hold more than 100 million shares of HP stock. The junior Packard is the founder of the Packard Humanities Institute, which owns 25.76 million shares of HP, or about 1.3 percent of the company. The David and Lucile Packard Foundation is HP's largest stakeholder, with an ownership share exceeding 10 percent of HP.
The David and Lucile Packard Foundation has not yet decided which way it will vote on the merger, according to its chief financial officer George Vera and is awaiting the proxy statement outlining the deal to be filed by Compaq and HP with the U.S. Securities and Exchange Commission before making such a decision.
William R. Hewlett died earlier this year and David Packard died in 1996.