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But to insiders, Hewlett's move was no surprise--he skipped a key meeting four months ago to discuss the largest merger in the technology industry. The performance was part of the annual summer event, which ran July 13-28, according to the 28 Bohemian Action Network, a group that is critical of the club. The all-male Bohemian Club comprises rich businessmen, politicians and some influential artists. Past summer gatherings have begun with some attendees donning red-hooded robes and cremating a coffin effigy at the base of a 40-foot owl, said Action Network representative Mary Moore. Until last week, Hewlett was largely a background figure at HP. He thrust himself into the controversy over the HP-Compaq merger by 29 publicly opposing the union, the only HP or Compaq board member to do so. David Packard, son of HP's other founder, also opposes the merger, but he is not a board member. HP took the industry by surprise in September when it announced it would acquire Compaq in a stock swap valued around $25 billion. The deal would mark one of the largest technology mergers in history and would put two big brand names together in an attempt to give greater competition to IBM. Although the companies have touted the complementary benefits of the merger, from products to cost-savings, Wall Street has largely panned the deal. Since 30 it was announced, the value has fallen to around $20 billion due to a decline in the value of HP and Compaq shares. While Hewlett's opposition is not enough to derail the deal, it has further raised concerns that were already building among many investors and analysts--not to mention creating ill will among his fellow board members. Because of Hewlett's decision, some analysts speculate that the merger could be tarnished by an ugly and public tug-of-war. Although some investors oppose the deal, others are concerned that if the deal crumbles the company could be in worse shape because of an expected loss of top executives and credibility. HP Chief Executive Carly Fiorina, in particular, would likely quit if the merger fails, said a source familar with the board. The high stakes have put a spotlight on Hewlett's actions, which are unusual because he privately voted with the board, then voiced his opposition through a publicly issued press release. After missing the first day of the key two-day meeting, Hewlett listened on the second day as each of the board members explained their reasons for supporting the merger. Rebecca Robboy, an HP spokeswoman, declined to comment on the board meetings and director discussions. After the board meeting and some time had passed, Hewlett eventually agreed to vote for the merger. But he noted there may be special circumstances in which a director's personal investment horizon, or portfolio, may dictate different actions. Last week, after news of Hewlett's opposition, the boards of both companies publicly re-endorsed the deal. He called the board members about a half an hour before the press release went out; The timing of the objection also precedes another key date: HP is preparing to file a proxy outlining the benefits and risks of the deal with the Securities and Exchange Commission. He's doing this right before the proxy comes out," the source said. But Frank, who handles public relations for Hewlett, said the two events were not linked. The public statements were released Tuesday because that's when the independent financial advisers hired by the Hewlett family foundation to review the merger had returned with their decision, she said. Hewlett has hired proxy solicitation firm MacKenzie Partners to explore his options. Should other major investors join Hewlett and scuttle the deal, the likelihood that some HP board members, Fiorina and other executives will quit is high, the source said. Get Up to Speed 36 Enterprise Security 37 Open source 38 Utility Computing 39 VoIP 40 Web services 41 Wi-fi 42 Spam: Report Card 2004 ZDNet's Dan Farber and NetsEdge Research Group's Peter Christy look at the latest weapons used to fight spam.
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