Advertisement
Promo

Desktop platforms Toolkit

Proxy war darkens HP-Compaq merger

Margaret Kane GameSpot Europe

Published: 06 Dec 2001 07:31 GMT

  • Email
  • Trackback
  • Clip Link
  • Print friendly
  • Post Comment

Walter Hewlett has fired off another round in his budding proxy war with Hewlett-Packard, this time highlighting the poor performance of HP and Compaq Computer since the companies announced plans to merge.

Hewlett, the son of HP co-founder William Hewlett, said in an amendment filed with the Securities and Exchange Commission on Wednesday that HP's stock dropped 5.3 percent and Compaq's stock dropped 17.8 percent between 31 August and 30 November.

For that same time period, the Nasdaq gained 6.93 percent and the Dow Jones industrial average fell 1 percent.

Hewlett recently said he plans to solicit proxy votes on behalf of shareholders opposed to HP's planned acquisition of Compaq and has also hired a proxy solicitation firm.

The Hewlett family, along with David Packard, has come out against the deal. The family has been regularly filing amendments to its 16 November proxy statement.

HP announced plans to purchase Compaq for $25bn in September.

Hewlett also draws attention to the decline in expectations for the companies' future performance. The consensus estimates for Compaq's 2002 and 2003 earnings per share have fallen 77.3 percent and 60.2 percent, respectively. Consensus estimates for HP have dropped as well.

As a result, Hewlett maintains, the price-to-earnings ratio that HP is paying for Compaq has increased to 92.7 from 22.2 for fiscal 2002 and to 39.7 from 16.7 for fiscal 2003. The rising P/E ratio -- a measure of how expensive a stock is -- means HP is getting less earnings bang for its buck.

See techTrader for the latest financial news in the high-tech sector.

Have your say instantly, and see what others have said. Click on the TalkBack button and go to the techTrader forum

Let the editors know what you think in the Mailroom. And read other letters.

  • Email
  • Trackback
  • Clip Link
  • Print friendlyPrint with EPSON

Did you find this article useful?
57 out of 82 people found this useful


Full Talkback thread

0 comments


Company/Topic Alerts

Create a new alert from the list below:








Video icon

Video

Microsoft Windows 7 Special Report Special Report

How Microsoft can make Windows 7 a success

How Microsoft can make Windows 7 a success

Comment Many businesses have given Vista a wide berth; Microsoft must focus on five areas to make sure Windows 7 doesn't suffer the same fate, argues TechRepublic's Jason Hiner

More Special Reports

Desktop Management Benchmarking

Test Your Desktop Management Systems

How good are your company's desktop management solutions? How do they compare with those of your peers?

Take two minutes to complete our new Desktop Management and Energy Consumption benchmark, and find out what issues your business needs to focus on.


Skip Sub Navigation Links to CNET Brand Links

Help

Become part of the ZDNet community.

Newsletters