Posted on 03/08/2002 5:31:17 PM PST by TroutStalker
Edited on 04/22/2004 11:46:19 PM PDT by Jim Robinson. [history]
The California Public Employees' Retirement System said it will vote against Hewlett-Packard Co.'s plan to buy Compaq Computer Corp., a small but potentially important strike against the $22.4 billion technology deal.
Calpers, the largest public pension fund in the U.S., owns 7.6 million H-P shares, or 0.39%, making it H-P's 30th largest shareholder. But while the number of shares Calpers owns doesn't put it on H-P's largest-shareholder list, the pension fund's position on the deal could have an outsize effect because it is known for its rigorous corporate governance actions. Calpers manages assets of more than $152 billion, with holdings in more than 1,700 publicly traded companies.
(Excerpt) Read more at online.wsj.com ...
I stopped reading the article about right there.
Mergers inevitably create disasterous management problems and a demoralized workforce. This creates worse service and destroys jobs.
I don't know why companies still do it when the consequences seem so negative.
Can anyone list a merger where the two companies wound up stronger together than apart?
D
I didn't want to say it, but I sure was thinking it! ;-)
Bill/Hillary?
False Prophet/Satan?
Oops, I'm being redundant. . .
There are three kinds of mergers. One of them is usually successful. When a winner takes over a loser things usually turn out good. The winner moves in, fires a lot of the losers and makes it a winner. The winner becuase it is a winner has a surplus of smart talent and they eat the losers lunch... In the corporate battle that follows every merger the losers get tossed becuase they are not nearly as sharp os the winners. A winner taking over a loser works.
The second is when two winners merge. Nothing much good happens except the sum is small than its parts. The two staffs fight for control, and forget about defeating the competition. The competition the staffers worry about are the guys from the other winner. He could get my promotion I need to knife him now. That is a bad scene.
The third is the merger of two losers. If big was better then New York would be better run than Columbus Ohio. The simple truth is it is a lot harder to run a big firm than it is one half the size. They always say they can combine things and get more for the bucks. But it never happens. Anyone who has spent any amount of time in both a big concern and a small concern knows the small one is a lot more efficient.
So when people tell you big is more efficient, then ask them to bet you that California and New York are better run than Ohio.
So would I.
But it stil begs the question of whether unions / government agencies should be voting in matters like this. Their motives aren't necessarily always the best interests of the underlying shareholders.
We own some Agilent stock and it seems to be getting some momentum. Florina spun this off some time ago and now she wants to buy a loser computer co. Makes more sense to buy it cheap and scrap it to increase market share.
However, I wonder about this decision. The company that takes really hard looks at mergers, just this morning gave its blessing to this merger to the wall street people.
One of the major conflicts Calpers has is that it tries to represent the socialist bent of most Cali state employees and their good good Polly Anna approach to flat hating business. So they will make poor business decisions based on the environment, diversity and other weird basis.
A really interesting event will happen soon. Fadeout Fascist Davis will try to sell the most stupid bond issue ever sold to pay for our cost of electricity last year not capital out lay. The costs of this bond issue have gotten out of hand. The state is approaching bankruptcy faster than a speeding bullet under Davis. Davis needs to sell those bonds which are being downgraded before they come out.
If Calpers buys those bonds, they could be putting their investors at a high risk. If they don't buy the bonds, Davis will go evan more insane as he needs to sell those bonds and will be counting on good old Calpers to buy a slug of them!
Can you say it smells like scientology? I heard awhile back that Compaq had a big problem with this in Munich....
Can you say it smells like scientology? I heard awhile back that Compaq had a big problem with this in Munich....
I don't know about "two of the crappiest," but on the consumer side, I would say two of the ugliest. Where did they get the designers to make the PCs look like obsolete jukeboxes on the day they were made?
More importantly, this reminds me of a quote in the business newspaper, Barron's, some time ago when Sperry Rand and Burroughs were about to combine to make Unisys -- the "power of two," as it was then called. Some analyst commented that some mergers take two walking wounded and weld them together to produce one big bloated corpse. I voted with Hewlett Jr.
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