HP/Compaq: Compaq CEO was down on merger chances

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HP/Compaq: Compaq CEO was down on merger chances

Just weeks before the shareholder vote, Compaq chief executive officer and president Michael Capellas wrote in his personal journal that he believed the Hewlett-Packard/Compaq merger was in trouble, according to evidence presented in court.

The journal entry, was revealed during opening remarks by attorneys for Walter Hewlett, a dissident HP board member seeking to block the merger.

Capellas wrote that the merger would be a case study for business students for years to come and that under its "current course and speed we will fail", according to Hewlett's attorney Steve Neal.

Neal went on to present a variety of documents that he said showed an internal HP/Compaq committee had a much bleaker financial outlook on results of the merger than those made by managements' public statements.

HP's attorneys contended in their opening statements that those documents were out of context and purposefully conservative.

HP chief executive officer Carly Fiorina and chief financial officer Robert Wayman, as well as HP board member Phil Condit, chairman and chief executive officer of Boeing, are scheduled to testify in the trial to determine if HP's management tried to buy the votes of Frankfurt-based Deutsche Bank.

The trial, stems from a lawsuit filed by Hewlett last month to block the merger of the two companies. Hewlett maintains that HP management persuaded Deutsche Bank to switch 17 million votes it had originally cast against the merger by making the bank the co-arranger in a multibillion-dollar line of credit.

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