Hewlett-Packard and Compaq are being urged to scrap their $19.7 billion merger by a US value-investment fund which owns shares in both businesses.

According to the Wall Street Journal, Matrix Asset Advisors sent a letter to the boards of HP and Compaq last week asking them to rethink the deal.

The paper quotes Matrix chief investment officer David Katz saying his firm intends to vote against the merger. Matrix owns 531,675 HP shares, and 826,846 Compaq shares, equating to ownership of two-to-three per cent in each company

According to Katz, Matrix will get more for its money if the companies remain separate, and with far less risk.

HP and Compaq say they've had positive and negative feedback on their plans. But they're pressing on with the deal.

HP CEO Carly Fiorina has announced the top brass at HPaQ. Compaq chief technology officer Shane Robison will be the CTO and senior VP of the business. Compaq CTO Bob Napier will be CIO and take charge of the combined businesses' IT systems. Dick Lampman, director of HP Labs, will keep the same job.

Fiorina will be CEO of HPaQ, Compaq CEO Michael Capellas will be president. ®