Shareholders of Compaq approved the company's planned acquisition by HP by a nine-to-one margin, Compaq announced yesterday, following a special meeting in Houston. Their putative merger partners in California are not quite as happy about the move
The official result of HP's shareholder vote, which closed Tuesday, is not yet known. But HP said preliminary results show the merger has been approved by what company chief Carly Fiorina termed a "slim but sufficient" margin.
But opposition leader Walter Hewlett, an HP board member and son of a company founder, said the results are too close to call and that he remains "optimistic" the acquisition will be defeated.
The Compaq shareholder meeting was a more amiable affair than the HP vote a day earlier. Laughter could be heard at The Wyndham Greenspoint Hotel in Houston, as a calm Michael Capellas, head of Compaq, answered questions at a press conference after the vote.
"This is an unbelievable movement in terms of the industry," Capellas said. "There are few companies that have the global reach of this entity."
Capellas called the merger the highlight of his career and cracked several jokes during the press conference. His counterpart at HP, Fiorina, faced a much tougher crowd on Tuesday.
At HP's vote, in Cupertino, California, throngs of objectors to the acquisition lined up outside The Flint Center, one of them beating a drum and several handing out flyers calling for investors to vote against the deal.
Critics grilled Fiorina during a question-and-answer session at the vote, with some current and former employees saying management had misled them. One engineer claimed he had worked at HP more than 20 years but would quit if the merger was approved.
A combined HP and Compaq would have close to 155,000 employees, of which 15,000 will be let go as the companies link their businesses, the companies have said.
A number of Compaq product lines will probably play a big role in the combined company's future. So far, executives have said that Compaq's high-end fault-tolerant computers, low-end servers and storage products are the biggest complements to HP's strengths in Unix servers, printing and imaging.
Objectors to the deal have said a merged company would be shackled by Compaq's large PC business, claiming this market is too competitive to generate large profits.
The launch of the new company could begin in April, Capellas said, adding that the Compaq brand may be retained for some products.