RealTime IT News

HP Loses Brandes Vote, Packard Commissions Another Poll

David W. Packard, son of Hewlett-Packard co-founder Dave Packard, this week released the results of a second employee poll taken at HP's Boise, Id. location.

The survey indicated that 63 percent of those polled by Field Research Corporation were opposed to the company merger with Compaq Computer Corp. Only 26 percent of respondents were in favor, with 11 percent still undecided.

Field Research is the same company that performed Packard's first poll in Corvallis, Ore.

Field Research also revealed that 57 percent of former HP employees in the area, namely retirees who still hold a significant percentage of shareholder voting power, were opposed to the merger.

The Boise poll was based on a random sampling of 235 current and 237 former employees living in the area. Respondents were asked by telephone to comment on whether they believed HP was a better or worse place to work now than when they first started, share opinions about the company's overall direction, news about the merger, and their overall opinion of the plan, meaning Walter Hewlett's "Focus and Execute" alternative business strategy to the merger.

Out of those pollsters in favor of the merger, all agreed that it would make HP stronger, bigger, and more competitive, according to Field Research. Whereas 30 percent of those opposed to the merger, feared for their job safety and the possibility of company layoffs. HP employees represent 3 percent of company shareholders.

In his previous poll, Packard was criticized for interviewing a group of only 445 employees out of an estimated 6,000 employees in the Corvallis area. Packard also published an ad in local Corvallis newspapers prior to the first poll that some say may have corrupted the overall results of the poll.

HP management claims the result of its most recent employee poll yielded a 65 percent favor rating and that the company it hired to conduct the survey interviewed a wider cross section of the company.

There is suggestion that Packard and Field Research may undertake a third and final poll at HP's Fort Collins, Colorado location.

In the meantime, San Diego, Calif.-based Brandes Investment Partners, a one of HP's top 12 corporate shareholders, announced plans to cast its vote in opposition of the merger.

In December, 2001, Brandes held 1.3 percent of HP shares, or 24.7 million shares.

Representatives for Brandes would not comment on the company's decision, although Vinit Bodas, a partner and senior analyst for Brandes told the Wall Street Journal that he favors Walter Hewlett's alternative business proposal to the merger.

"Putting HP together with Compaq is a gutsy and bold move," Bodas told the WSJ. "But our sense is that there are a lot of risks in doing that, including considerable cultural and integration risks."

Another major institutional shareholder to voice opposition to the merger this month is Victory Capital Management, which owns seven million shares of HP stock, bringing the number of investors voting against the deal to 20 percent.

However, a cluster of corporate shareholders including Alliance Capital Management Holding LP, Putnam Investments, a unit of Marsh & McLennan, and L. Roy Papp Associates have already cast their vote in favor of the merger. But many remaining investors say their vote is contingent on this Friday's report from Institutional Shareholder Services, a Rockville, Md. company that advises clients and financial institutions which way to vote in similar such cases as the HP/Compaq merger.

The Hewletts and the Packard's have already announced that they will pool their 18 percent voting power in opposition of the merger.

In an effort to influence more votes in favor of the merger, HP management, including CEO Carly Fiorina and CFO Bob Wayman, are slated to meet with Wall Street analysts Wednesday for an all-day pep talk on the benefits of the merger. The meeting comes just days before the Federal Trade Commission is expected to approve the deal.

The European Commission and the Canadian Competition Bureau have already given the merger the green light.

At press time, HP shares were up 35 cents to $20.33.