Business & Finance
The proposed $25.2 billion merger of Hewlett-Packard and computer industry rival Compaq was dealt a potentially fatal setback when the foundation of H-P cofounder David Packard announced late Friday that it would vote against the deal. The Packard Foundation is the company's largest stockholder, and its decision, coupled with the opposition of Walter Hewlett, son of the other cofounder, William Hewlett, gives the antimerger forces an 18 percent share of the vote. That means, analysts said, that H-P chief Carly Fiorina would have to win the support of at least 62 percent of the company's remaining shareholders - assuming they all wish to vote - for an absolute majority in favor of the deal. An H-P/Compaq merger would result in the world's largest personal-computer company. But, without elaboration, the foundation said its best interests "would be better served by Hewlett-Packard not proceeding with the proposed transaction." It was not clear whether H-P's executives would try to renegotiate the terms of the merger, which is expected to be voted on early next year. A company spokeswoman called the foundation's decision "disappointing." Compaq executives said only that they continue to support the merger.
There was more worrisome news over the weekend for financially troubled Argentina, as anxious depositors made a run on personal bank accounts for the second weekend in a row despite the government's new $250-a-week limit on withdrawals. And Economy Minister Domingo Cavallo was to return home from two days of closed-door meetings at the International Monetary Fund in Washington, apparently having failed to pry loose a $1.26 billion installment that the IMF announced last week it would not release "at this stage." Meanwhile, planners were organizing a national protest for Wednesday against the government's controversial austerity plan, which seeks to help meet $132 billion in foreign obligations. Servicing the massive debt already takes almost half of Argentina's gross domestic product, prolonging a recession that now is in its fourth year.