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Monday, 18 March, 2002, 20:03 GMT
HP and Compaq set for final showdown
Compaq and HP logos
A comparison between Hewlett-Packard's shareholders and fleas set the tone for the last full day of bickering between the warring sides in the contested merger of computer firms HP and Compaq.

On Tuesday, shareholders will pack into an auditorium in Cupertino, California to vote for or against HP's $20bn deal to buy Texas computer maker Compaq.

The largest ever merger between PC makers is being vigorously contested by the heirs of HP's founder, led by Walter Hewlett, eldest son of now-deceased William Hewlett.

Apart from the soap-opera dimensions of the fallout between Mr Hewlett and chief executive Carly Fiorina, two issues are dominating discussion of the merger's prospects.

The first is whether HP would be able maintain day-to-day operations without being distracted by the merger, while the second is when the PC market will recover.

Flea bitten

On Monday, the Financial Times quoted an HP official as saying that they had won large institutional shareholders, or the "elephants", but that the company was "getting eaten alive" by individual stock owners, referred to as "fleas."

HP chief executive Carly Fiorina
A 'No' vote could put Carly Fiorina's job on the line

"I ask HP to issue a public apology," Mr Hewlett declared, but HP has yet to respond.

Holders of more than 22% of HP's shares have vowed to fight the deal while about 8% support the pact, according to statements by institutional investors. Both Ms Fiorina, the chief architect of the Compaq pact, and Mr Hewlett, will address shareholders at the meeting and take part in a question and answer session.

The final tally of the vote may not be known for several weeks, and if it is too close, a challenge could force a recount.

Jack Ehnes, California State Teachers Retirement
"At the end of the day we couldn't find that this transaction made sense for shareholders."
The BBC's Patrick O'Connell
"Too close to call"
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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