War Within HP Deal With Compaq Gets Nastier

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For three months, the fight between Carly Fiorina and Walter Hewlett remained cordial and cool.

Fiorina, the Hewlett-Packard Co. chief executive, and board member Hewlett, the eldest son of company co-founder Bill Hewlett, had sparred since November over whether computing giant HP should buy rival Compaq Corp. Their dispute had been largely technical, full of conflicting financial analyses and theoretical arguments about the future of the company, even as both sides invoked the ghosts of HP's founders to support their cause.

No longer.

As the lobbying effort heats up to persuade shareholders to vote "yea" or "nay" on the $25 billion deal, the debate has become more strident -- and increasingly personal. In dueling ads, Web sites, colorful mailings and news conferences, each side has attacked the other's business savvy and integrity.

Take this statement, issued by the company on Monday, which aims to portray Walter Hewlett, a 57-year-old musician and academic, as an outsider with little knowledge of the corporate world, much less his father's company:

"Mr. Hewlett does not understand the linkages between our businesses and the importance of profitability, growth and market leadership in our industry. Among his latest assertions is the suggestion that we exit the PC business and shut down PC manufacturing plants. The fact is we have already outsourced our PC manufacturing."

Charles Elson, a professor of corporate governance at the University of Delaware, said the increasingly testy tone of the dispute is an indication that both sides expect the vote to be close.

News source: technews

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