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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Elwood P. Dowd who wrote (90949)	4/26/2001 7:46:29 PM
From: Captain Jack	Read Replies (2) \| Respond to of 97611

You guys are no help-- here it is.. NEW YORK, April 26 (Reuters) - Compaq Computer Corp. <CPQ.N> said on Thursday it would buy Internet consulting firm Proxicom Inc. <PXCM.O> for $266 million, in a bid to strengthen its services business. Compaq, the world's No. 2 personal computer maker, said it would pay $5.75 per share in cash for the outstanding stock of Proxicom. It said it sees the deal as neutral to earnings for the second half of this year but adding to earnings next year. "The addition of Proxicom will strengthen Compaq's value proposition to customers by supporting our already significant presence in telecommunications and financial services markets, and extending our capabilities in markets including retail, automotive, manufacturing, and media and entertainment," said Peter Blackmore, executive vice president, Worldwide Sales and Services of Compaq. Under the terms of the deal, Compaq will commence a tender offer for all outstanding Proxicom shares. Any Proxicom shares not acquired by Compaq in the tender offer will be acquired in a second-step merger. Compaq Global services is already a $7 billion business. Proxicom was founded in 1991, and its share price over the past year has fallen from a high of $57.25 seen last summer to trade in the $4 range for the past few months. Proxicom would become a wholly owned unit of Compaq. Raul Fernandez, Proxicom's founder, chairman and chief executive, said, "We are delighted to be joining Compaq with whom we've worked in both customer and partner roles." Proxicom last month was forced to slash 19 percent of its workforce, or 227 employees, and lower its financial outlook. The deal was announced after the close of regular trade. Proxicom shares closed at $4.33 on the Nasdaq on Thursday. The stock then rose to trade at $5.69 in after hours trade following the announcement, according to Instinet. Compaq closed down 79 cents, or more than 4 percent, at $17 on the New York Stock Exchange on Thursday. The deal followed a similar buyout of an Internet consultancy -- International Business Machines Corp. <IBM.N> said it would buy Mainspring Inc. <MSPR.O> in an $80 million deal earlier this month. ((--Nicole Volpe, New York Newsdesk (212) 859-1700)) REUTERS * end of story *