The families of the founders of computer giant Hewlett-Packard (HP) are opposed to the company's $21 billion merger with Compaq, and will use their combined stockholding in HP to vote against the merger.
Members of the family of HP co-founder William Hewlett said in a statement that they would vote against the deal. The Hewlett family and its trusts own about 106 million shares – about 5.5 per cent – of the company.
David Packard Jr, the son of co-founder David Packard, also intends to join the Hewlett family in opposing the merger.
David Packard Jr is the founder of the Packard Humanities Institute, which owns 25.76 million shares of HP, roughly 1.3 per cent of the company. The organization is "extremely unlikely" to support the merger, according to Packard's statement.
The David and Lucile Packard Foundation, which is separate from the Humanities Insititute, owns 201 million shares, or 10.4 per cent. Analysts said the decision by the families could be the kiss of death for the merger, because it could influence other shareholders to also vote against the deal.
In the statement, Walter Hewlett, an HP board member, said: "After careful deliberation and consultation with my financial advisers, and consideration of developments since the announcement of the merger, I have decided to vote against the merger.
"I believe Hewlett-Packard can create better value for stockholders as a stand-alone company than as a company combined with Compaq."
Walter Hewlett, Eleanor Hewlett Gimon, Mary Hewlett Jaffe and The William Hewlett Revocable Trust said they intend to vote their shares of the company against the proposed merger.
In voting against the merger, Walter Hewlett cited sluggish growth in the PC and low-end server markets, the potential dilution of HP's profitable printer and imaging business, and customer uncertainty that could be created after the merger.