Fiorina sets out the world according to HP-Compaq

HP CEO Carly Fiorina has finally outlined what the fiscal future could look like after the company's merger with Compaq.

In an interview with the Financial Times, she said that three financial scenarios were being debated in the HP boardroom.

The first involves cost-cutting measures aimed to save the company up to $2.5bn.

The second is a more drastic round of job cuts and product mergers to save even more money.

The third is a scenario in which revenues beat targets, eradicating the need for plans A or B.

She claimed shareholders should expect an initial revenue loss of five per cent in the wake of the merger.

However, Fiorina has yet to convince the HP board of the merits of the deal. The acquisition has already met major opposition from Hewlett and Packard family members whose 18 per cent share represent a substantial blocking vote.

In addition, the merger has yet to be approved by European Union regulators.

Fiorina said HP has held intensive talks with regulators but intimated the company will not formally file for approval until it was confident that assent would be given within a 30-day period.

Speculation is also mounting that the current HP board will resign if the deal fails. Lawyers for Walter Hewlett, one of the most vocal opponents, sent a letter to HP's chief legal counsel, Larry Sonsini, requesting that the company confirm or deny these reports in the New York Times.

HP board member Richard Hackborn was quoted as saying if shareholders turned down the merger "they will have to get a board and a management".

Sonsini subsequently issued a statement denying all reports.