By Los Altos
Town Crier Staff Report
One of the potentially largest technology deals of all time was clouded in uncertainty last week following a meeting at the David and Lucile Packard Foundation in Los Altos last week.
Members of the Packard family, who control about 5 percent of the Hewlett-Packard Company stock, expressed concern over a possible deal that would merge the company with Compaq Computer Company.
The Los Altos-based David and Lucile Packard Foundation announced Friday afternoon that it has preliminarily determined to vote its shares of Hewlett-Packard Company against the company’s proposed merger with Compaq Computer.
“The board of trustees understands the strategic considerations being addressed by management, but after thorough study and analysis, the board has preliminarily decided, on balance, that the best interests of the foundation would be better served by Hewlett-Packard not proceeding with the proposed transaction,” said Susan Packard Orr, chairwoman of the David and Lucile Packard Foundation.
Members of the Hewlett family have also expressed concern over the potential merge. The Packard and Hewlett families control about 17 percent of the company’s stock, according to business reports.
Their shares are not enough to stop a merger, but family opinion could influence other shareholders to oppose the business deal.
Carly Fiorina, chairwoman and chief executive officer of HP, announced plans earlier this year to buy out Compaq Computer for $25 million, making HP an $87 billion global technology leader. The merger is expected to generate cost synergies reaching approximately $2.5 billion annually and to drive a significantly improved cost structure, according to an HP press release.
In a joint statement released earlier this month, HP and Compaq Computer companies said, “Our firm commitment to this merger stems from our conviction that it will deliver the industry leadership and earning growth our shareholders expect and our employees deserve.”
The David and Lucile Packard Foundation is a private foundation created in 1964 by David Packard, co-founder of Hewlett-Packard Company, and Lucile Salter Packard. The foundation provides grants to non-profit organizations worldwide. The foundation’s assets were approximately $6.4 billion as of Nov. 30. Grant awards totaled approximately $614 million last year. The foundation expects to make grants of approximately $460 million this year.
