According to a media release from CalSTRS, the pension fund has the following concerns:
- the magnitude of the integration risk, which seems insurmountable given the size and complexity of the transaction
- that the merger would dilute HP’s position in its profitable printer and imaging unit.
CalSTRS, the nation’s third largest pension fund, holds 3.3 million shares of HP and 5.3 million shares of Compaq in its $100-billion investment portfolio. The pension system serves approximately 687,000 members and benefit recipients.
In a similar move, the California Public Employees’ Retirement System (CalPERS) announced late last week that it too would vote its 7.6 million shares, or 0.4% of outstanding HP shares, against the merger.
CalPERS also owns 0.39% of the outstanding shares of Compaq, according to Lionshares.com, a firm that tracks corporate ownership.