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Technology Stocks : Digital Equipment Corp. (DEC)

DEC 14.32

-5.4%

3:59 PM EST

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To: Sonki who wrote (3104)	4/6/1998 11:58:00 PM
From: Charles Skeen	Read Replies (1) of 3276

Re: <<anychance that DEC/CPQ merger may not happen?>> There is always a chance that the deal will fall apart, but everything that I have read suggests that both companies are very committed to making it happen. If you are bullish on the future of the combined enterprise, buy CPQ. You will get more action -- over 2 shares of CPQ for the price of 1 share of DEC. If you think that CPQ will be at the same price when the deal closes (in June, say) then buy DEC now for 51 15/16. In June you will get .945 shares of CPQ plus $30 in cash for a value of 53 5/8. This is 3.2% more than the current price of DEC, about a 20% annualized return. As it happens, I sold the last of my DEC shares today. Just wanted to reduce my equity exposure for the short term and this seemed like the best place to do it. May buy back CPQ in 2-3 weeks, but am concerned about the prospect for boxmakers in an atmosphere of falling prices. (No tax consequences to DEC sale -- shares were held in IRA account.) Charlie.

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