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Sunday, 17 March, 2002, 10:47 GMT
HP boss in final push for merger votes
Newspaper ads promoting the shareholder vote
HP has made a very public push for 'yes' votes
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By Maggie Shiels
In San Francisco
The stage is set for the final act in a bitter feud over Hewlett-Packard's proposed $23bn merger with Compaq Computer.

The location is Silicon Valley in California where shareholders will have one last chance to cast their vote for a deal that could create the world's biggest computer company.

Despite the fact tens of millions of dollars have been spent trying to sway voters, this race is still too close to call

The main characters, in what has been described as the most expensive proxy fight in corporate history, are HP's chief executive Carly Fiorina and Walter Hewlett, the eldest son of Bill Hewlett who founded HP with his friend David Packard in a Palo Alto garage 63 years ago.

Analysts say that despite the fact tens of millions of dollars have been spent trying to sway voters so far, this race is still too close to call.

At the close of business on Friday, roughly 9% of HP's shares were thought to be in favour of the deal and 23% opposing it. The rest are undecided or unwilling to take a public position.

Powerful or bloated?

In an effort to win the hearts and votes of the undecided, both sides have been running full-page advertisments in the newspapers every day for weeks.

At the Flint Centre in Cupertino on Tuesday, Ms Fiorina will make a last gasp attempt to persuade shareholders that by combining with Compaq, they will be a powerful competitor to IBM and fill in gaps in HP's own product lines.

A merger would result in combined revenues of $87bn and also lead to the loss of 15,000 jobs worldwide

When Mr Hewlett gets his turn on centre stage he will go all out to emphasise his belief that buying Compaq would dilute the HP brand and its printing business and leave it with a bloated personal computer division.

Wall Street for its part has largely opposed the deal since its announcement last September.

Backroom plans

While a merger would result in combined revenues of $87bn, it would also lead to the loss of 15,000 jobs worldwide.

Where the axe will fall is unknown. HP spokesperson Rebeca Robboy said: "We haven't drilled down these details and worked out where in the world they will happen.

If the merger fails, Carly Fiorina will be forced to walk the plank

"Only after we know how the merger vote has gone can we look seriously at this issue."

It is understood however that since October last year a backroom team has been working out these very logistics.

The San Jose Mercury News reports that a so-called Eclean team of up to 900 people has spent 500,000 hours deciding which product lines will live and which will die, which suppliers and partners will get more business and which will be dropped and which offices will be occupied and which vacated.

Out shopping

If the merger succeeds, Carly Fiorina will continue as chief executive. If it fails, she will be forced to walk the plank.

For the past week or so, rumours have been circulating that Mr Hewlett has already been out shopping for a successor and has publicly stated that the next chief has to be someone who does not need to learn on the job.

Even though Tuesday's meeting will bring the curtain down on this particular act of a drama that has rivetted the business world, the final scene is probably several weeks away.

See also:

14 Nov 01 | Business
Hewlett-Packard battles for Compaq
25 Jan 02 | Business
Compaq raises profits outlook
05 Sep 01 | Business
Jobs slashed in biggest PC merger
06 Sep 01 | Business
Tough sell for PC giants merger
04 Sep 01 | Business
Profile: HP's Carly Fiorina
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