Dow Jones article on Compaq/Dec - from the DEC thread:
Compaq Gains 5% After Bullish Bear Stearns Comment
NEW YORK (Dow Jones)--Compaq Computer Corp. (CPQ) shares continued to
climb Wednesday, rising more than 5% after an extremely bullish report by Bear Stearns & Co.
In a research note released Wednesday morning, Bear Stearns & Co. analyst Andrew Neff praised Compaq's plan to acquire Digital Equipment Corp. (DEC), which was announced last week.
Neff wrote that the two companies fit well together strategically, and that Compaq "may actually pay below market value" for Digital.
Using a fairly complex formula, Neff calculated that Compaq will end up paying $25 to $30 a share for Digital, far less than the $60 a share that was estimated.
Neff conceded that there are "risks in the short-term" for Compaq as it folds Digital into the company. But he emphasized that the deal makes Compaq very competitive with computing giants International Business Machines Corp. (IBM) and Hewlett-Packard Corp. (HWP).
Compaq was the most actively traded stock on the New York Stock Exchange Wednesday, with almost 45 million shares trading hands.
The company's Nasdaq-listed shares recently were trading up 1 3/4, or 5.3%, at 34 3/4. Average daily volume is 20.8 million.
-Christopher Grimes; 201-938-5253 |
