Compaq Message Board - Msg: 481616

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Technology Stocks : Compaq

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To: hpeace who wrote (827)	11/24/1996 10:18:00 AM
From: Leo Francis	of 97611

CPQr's, CPQ's stock price will go up if CPQ buys NOVL with a stock swap according to some investment bankers I've talked to. The idea is NOVL shareholders would accept less than current value on their NOVL stock,(no benefit to arbritage or NOVL speculators) to acquire an appreciating stock(CPQ). CPQ shareholders benefit because the discounted purchase price will more than offset the minimal dilution. Cost savings could be attained at the expense of some NOVL employees,(functions absorbed by CPQ) thus making NOVL's cash flow much better. One thing I still don't understand, would this move give CPQ an advantage in the marketplace on the product/features/benefits side? How can CPQ increase profits with NOVL? Is there a strategic significance with the NOVL product lines, both current and future? I'm not an authority on NOVL products, so I hope somebody will explain the real world APPLICATION of NOVL's products with CPQ. LF

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