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HP won't re-nominate Hewlett to board
Hewlett-Packard Co said yesterday that it
would not reappoint Walter Hewlett to its board, after he tried to derail
its $19 billion plan to buy Compaq Computer, effectively severing ties with
one of the founding families of Silicon Valley.
Walter Hewlett, who is the son of HP co-founder Bill Hewlett, filed a
lawsuit last week to block the computer and printer maker's acquisition of
Compaq, alleging the company bought votes and misled a key adviser to seal
the deal.
Palo Alto, California-based HP said the board's decision not to nominate
Hewlett, who has been fighting the merger for months, was based on his
adversarial relationship with the company and in particular the lawsuit.
Sam Ginn, the head of HP's nominating committee, said in a statement that
the company had intended to nominate Hewlett until he filed suit. He said
the board was shocked by the suit.
"His recent actions have again violated basic principles of trust," Ginn
said.
Walter Hewlett, who was the last member of the Hewlett or Packard families
to sit on the board, said he regretted the decision. Together, the families
control 18% of HP's stock.
"It is unfortunate that the HP board has seemingly missed what the company's
stockholders have clearly recognised: that dissent is not disloyalty, that
healthy boards need not agree on every issue and that while the management
and board may run the company, the stockholders are the true owners of a
company," he said in a statement.
Without commenting on the reason for the move, one investor said that even
without Hewlett, HP's board is strong.
"I don't view it as a major factor for the company because they still have a
large, well-qualified board," said Noel DeDora, MD and senior portfolio
manager at Fremont Investment Advisors, which owns HP shares and voted for
the merger.
One small investor who fought loudly against the deal said the decision
discounted the value of independent directors.
"In a world where investors are craving independent directors that are
willing to question management, this flies in the face of that," said David
Katz, chief investment officer at Matrix Asset Advisors.
Hewlett filed suit last week against HP in Delaware Chancery Court in an
effort to prevent the deal, announced on 3 September, from going through. He
alleged that HP management bought votes in the contentious HP shareholder
vote last month and misled a key adviser about the deal.
BY REUTERS
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