Hewlett family shun Compaq takeover

Hewlett-Packard's plan to take over Compaq and create a technology powerhouse was dealt a severe blow after the founding Hewlett family said they would vote against the deal.

Hewlett-Packard shares jumped and Compaq shares fell on expectations of the death of the merger, which has been panned by Wall Street and questioned by investors.

The Hewlett family control around 5% of the stock, but have no say in the running of Hewlett-Packard. The company, aware of the influence that the family might hold over investors and other shareholders, refrained from attacking them in a mildly worded statement.

"While we regret very much the Hewlett family's decision, we are not surprised. The HP Board of Directors and HP and Compaq remain fully committed to the merger and expect shareholder approval."

Members of the Hewlett dynasty continued to attack the move, however.

"I am absolutely certain that Compaq is not the right partner for Hewlett-Packard," Walter Hewlett, son of founder William, revealed. "Given the lack of stockholder benefits, I believe the risks are not worth taking."