Should be moot shortly !!
EU readies Compaq-HP deal decision
Dealers expect small gain in Compaq if it's approved
By Emily Church, CBS.MarketWatch.com --- 1/31/02
LONDON (CBS.MW) -- European Commission antitrust regulators are expected on Thursday to announce whether they'll approve Hewlett-Packard's acquisition of Compaq Computer.
The Commission will either approve the deal linking the PC makers without concessions or to seek a more intense, four-month review of the $22 billion merger's impact on competition in the market, officials in Brussels said.
They would not comment on what time Thursday afternoon they expect to announce the decision. Thursday is the EC's deadline for a decision.
Compaq Chief Executive Michael Capellas told an investor conference Wednesday that he feels more confident on the prospects for the H-P merger now than he did four to six weeks ago, according to Banc of America Securities analyst Joel Wagonfeld.
Shares of Compaq (CPQ: news, chart, profile) and H-P (HWP: news, chart, profile) weren't trading in the speculative pre-open session on Thursday in London, dealers at Instinet said.
However, shares of rival Dell Computer (DELL: news, chart, profile) were up 22 cents at $27.79; Apple Computer (AAPL: news, chart, profile) was up $24.17, a gain on 8 cents in Germany, according to data from Nasdaq-Live.
If the Competition Commission approves the merger without conditions, dealers in London expect Compaq shares may rise as the spread between the two stocks close because the timeline for a link-up has accelerated.
Still the spread doesn't have that much room to contract, according to Wagonfeld. He said on Thursday investors "have become more open to considering the potential merits of the proposed merger, and this subtle shift in sentiment ... is reflected in the narrowing of the arbitrage spread."
The deal still faces a contentious shareholder vote; H-P director Walter Hewlett, the son of company co-founder William Hewlett, for one is opposed to the merger. |
