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Technology Stocks : Dell Technologies Inc.

DELL 119.68

-0.6%

Jan 13 3:59 PM EST

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To: JUJU1015 who wrote (9021)	6/23/1997 9:11:00 AM
From: Jaap Langenberg	of 176387

Compaq to acquire TANDEM COMPAQ COMPUTER CORP. (CPQ) 106 3/4 CLOSED.Well it finally happened. After much talk that Compaq was in the market to acquire a partner that would solidify its position in the market and, after both Gateway 2000 (GTW 33 3/4) and Micron Electronics (MUEI 18 11/16) turned down its offer, Compaq has found a partner in Tandem Computers (TDM 15). Compaq announced this morning that it is buying Tandem for about $3.0 billion in stock. The company will issue 29 million in shares or 0.21 shares for each Tandem share. This works out to about $22.50 a share or a 50% premium to Tandem's closing price. Compaq said that the tax-free deal would be "immediately accretive" and because of the pooling of interest method of accounting for the purchase, the company is now rescinding its systematic share repurchase program. The deal makes sense for both concerns as Tandem's fault-tolerant computer systems should fit nicely with Compaq's effort to expand its sales efforts in the finance and telecommunications areas. The purchase is also designed to strengthen Compaq's focus on the customer, something that has bothered Compaq in the past as it felt that Gateway and Dell Computer (DELL 119 1/2) were doing a better job of staying in touch with their customers. According to Eckhard Pfeiffer, President and CEO, Compaq, he feels the acquisition "will truly offer complete solutions, from hand-helds and portables, to networked desktops and workstations, all the way to Windows NT servers and the Himalaya range of massively parallel commercial systems." Certainly, expect shares of Tandem to move up to the $22.50 range this morning while Compaq could stay in place or move down slightly on the announcement.

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