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

To: Elwood P. Dowd who wrote (93951)	12/5/2001 10:27:51 AM
From: Elwood P. Dowd	Respond to of 97611

Proxy War Looms on Merger by: skeptically 12/05/01 10:23 am Msg: 262775 of 262775 news.cnet.com Proxy war looms over HP-Compaq deal By Margaret Kane Staff Writer, CNET News.com December 5, 2001, 6:35 a.m. PT Walter Hewlett has fired off another round in his budding proxy war with Hewlett-Packard, this time highlighting the poor performance of HP and Compaq since the two companies announced plans to merge. Hewlett, the son of HP co-founder William Hewlett, said in an amendment filed with the Securities and Exchange Commission on Wednesday that HP's stock dropped 5.3 percent and Compaq's stock dropped 17.8 percent between Aug. 31 and Nov. 30. Hewlett recently said he plans to solicit proxy votes on behalf of shareholders opposed to HP's planned acquistion of Compaq, and has also hired a proxy solicitation firm. The Hewlett family, along with David Packard, have come out against the deal. The family has been regularly filing amendments to its Nov. 16 proxy statement. HP announced plans to purchase Compaq for $25 billion in September. Hewlett also draws attention to the decline in expectations for the companies' future performance. The consensus estimates for Compaq's 2002 and 2003 earnings per share have fallen 77.3 percent and 60.2 percent, respectively. Consensus estimates for HP have dropped as well. As a result, Hewlett maintains, the price to earnings ratio that HP is paying for Compaq has increased to 92.7 from 22.2 for fiscal 2002 and to 39.7 from 16.7 for fiscal 2003. The rising P/E ratio--a measure of how expensive a stock is--means that HP is getting less earnings bang for its buck. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I wonder if Walter is moaning and groaning so Fiorina will buy him out? What as that $1B debt offering HP floated for anyway??? The merger value is again back to about $25B.