eNews and Views: Like Super Tuesday in the presidential primaries, HP/Compaq's big event might force-feed buyers something they don't want.
Back in 1988 presidential primaries, Super Tuesday was introduced as a means for the political parties, particularly the Democrats, to put all their eggs in one basket. Whoever won Super Tuesday, the logic went, would win the nomination and have a good shot at the White House.
A funny thing happened on the way to the polls, however. The Southern candidates for whom the mega-primary was created (particularly Al Gore and Richard Gephardt) pretty much ignored the North, East and West, and when the dust settled it was Massachusetts Gov. Michael Dukakis who won the Democratic nomination and George Bush "41" who won the presidency.
Flashing forward to this week, we exchange presidential politics for corporate proxy battles, and this time all the eggs in the basket belong to HP and Compaq. The HP shareholders voted Tuesday
and the Compaq shareholders vote today, some six months after the takeover was announced. The brain trust that put this opportunity together, Carly Fiorina of HP and Michael Capellas of Compaq, had better hope they campaigned well enough and that theres a strong turnout at the polls.
In the last six months, weve witnessed enough politicking, attack ads and stump speeches to last until the 2004 presidential election. From the HP camp weve heard every conceivable reason to approve the merger short of Microsoft-inspired "its good for the economy" rhetoric. From the renegade Walter Hewlett camp weve heard smears but not much of an alternative outside the status quo. From the Compaq camp weve heard surprisingly little.
Missing as well were blueprints of what the post-apocalyptic HP will look like and actually try to accomplish, outside of laying off thousands. Thats understandable considering that revealing those plans prior to the merger being OKd is frowned upon by the SEC. Shareholders have only Fiorinas assurances that they will be better off.
Only one thing is certain: Whatever the outcome is, it will not live up to the expectations. Given the incredible challenge facing Fiorina, should the deal be approved, we hearken again back to Gore, this time during his latest campaign, when some observers wondered if Gore really wanted to be president. In Fiorinas case, she clearly wants the job, but why is another matter. Leading HP through this economy would be hard enough; dragging Compaq along can only make it harder. The longer we analyze the deal, the more it looks like its all about power, and not about benefiting the shareholders.
If the vote failsand we wont know for days or possibly weeks what the official tally will beFiorina & Co. can be blamed, like the political party luminaries who created Super Tuesday, for trying to force-feed the public something it clearly didnt need or want. If the merger goes through, the corporate and consumer buyers eventually will speak again, though not with proxy votes, but with their wallets. They will determine the true winner and loser.
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