Compaq Message Board - Msg: 8967066

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Technology Stocks : Compaq

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To: Kevin A. Lynch who wrote (58183)	4/16/1999 1:53:00 PM
From: rupert1	Read Replies (2) of 97611

Kevin: AV is a wholly owned subsidiary of COMPAQ. It will go public sometime later this year - subject to market timing. Indications are that it will be ready between August and October. The equity structure has not been announced. However COMPAQ will retain ownership of a majority of the shares, variously thought to be 60-80% The primary purpose of the spin-off is to raise capital for AV's ongoing development and operations. AV's inflated share-price, after the IPO has been launched, will also allow it to make acquistions using its own shares. Therefore, it might be logical that shares are not "given" to anybody. But because the company has also said that the spin-off will "unlock shareholder value", many hope that shareholders of COMPAQ wll be gven free shares, or allowed to buy at the IPO price or be granted some other preferential deal. However, another interpretation of the phrase is that sharehodlers of COMPAQ will benefit from the value to COMPAQ's balance sheet which its large holding in AV will bring. In preparation for the spin-off COMPAQ is funding AV to develop organically and through acquisition.

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