HP heirs cast their spells

The Hewletts and the Packards have their say

What is it with the letters H and P at the moment? While the entire world seems to be going potty over a bespectacled wizard who can fly but isn't able to buy a pint down the boozer, the channel, shareholders and customers of both Compaq and Hewlett Packard (HP) are still bewitched by the merger mania induced by the possible tie-up.

Although HP supremo Carly Fiorina launched a passionate defence of the deal last week by claiming that making big calls was all part of the game to improve service and offerings, the proposed merger is a long way off being a done deal.

With the heirs of HP's co-founders announcing earlier this month their intention to vote against the agreement, the firm's executives must be wondering what they have to do to purchase a company these days.

Over the past few months HP has not had much luck with its acquisition targets. At the back-end of last year the company withdrew from its bid to buy the consulting arm of PricewaterhouseCoopers, which many in the channel at that time viewed with concern as it looked like adding 30,000 conflicts, sorry, consultants to its channel mix.

More recently, the company lost out to SunGard in a roller coaster battle for the continuity assets of fallen services company Comdisco.

Nevertheless, Carly and Co seem determined to complete the deal. Fiorina was bullish, saying that "taking small steps" just to maintain the status quo was not in the best interests of its customers, shareholders or employees.

Fiorina has gone a long way to calm the fears of many concerned about the deal, but whether she can sway the opinions of the David and Lucile Packard Foundation, which holds an important 10 per cent stake in the company, will be one for the philosopher's stone.