The Public Employees Retirement System of Ohio (PERS) said it would vote its 4 million Hewlett-Packard shares and its 4.3 million Compaq shares against the purchase.
“While acknowledging that the merger could produce cost savings, PERS believes that it would also dilute the value of Hewlett-Packard’s imaging business and increase its exposure to the commodity PC business,’ the fund statement said. “PERS also cites the significant execution risk.’
Management, which says it can create a technology powerhouse, has strong support of its own, including, it says, a majority of its top 20 investors.
The controversy comes to a head next week with a scheduled Tuesday vote at Hewlett-Packard and a Compaq vote the next day Some merger supporters expect an early indication of who wins the close race, though a final tally will take days or weeks.
Also Thursday the California State Teachers’ Retirement System came out on the opposition side, taking the view that the merger is not in the best interest of CalSTRS members and beneficiaries.
It joined fellow California pension fund CalPERS which made a similar announcement last week.
Meanwhile, Banc One Investment Advisors said it would vote its 0.26% H-P stake for the deal, adding their support to Putnam Investments, Alliance Capital and Barclays Global Investors.