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

To: hlpinout who wrote (94102)	12/10/2001 6:18:23 PM
From: hlpinout	Read Replies (1) \| Respond to of 97611

From Financial Times. -- news.ft.com HP maintains Compaq deal still on course By Scott Morrison in San Francisco Published: December 9 2001 20:51 \| Last Updated: December 10 2001 17:20 Hewlett-Packard on Sunday insisted it could still complete its controversial $25bn (E28.5bn) bid for Compaq Computer, even after HP's largest shareholder dealt the deal a severe blow by announcing on Friday it planned to vote against the offer. The computer and printer maker said it would now focus on winning the support of institutional shareholders in the wake of the decision by the Packard Foundation, a charitable organisation that owns more than 10 per cent of HP shares and is controlled by the daughters of one of the company's co-founders. However, most industry observers suggested HP faces an uphill battle to convince institutional shareholders to rally behind the deal. The Packard Foundation's announcement on Friday effectively creates an opposition block of Hewlett and Packard heirs who jointly control about 18 per cent of HP shares. Given the significant influence the two families have in Silicon Valley, many observers suggest their opposition will probably prove fatal to the proposed transaction. However, HP said on Sunday it could still win what is shaping up to be a battle between the current management and the families that symbolise the company's past. HP declined to comment on whether or not it would rule out making a possible attempt to renegotiate the terms of its agreement with Compaq. Critical to the company's efforts will be to sway Institutional Shareholder Services, the small but influential shareholder advisory group that represents a "considerable" number of HP investors. Hewlett-Packard maintains that ISS and other institutional shareholders will view the deal strictly from a financial perspective. "We expect ISS to make its decision based on financial and governance considerations. They have different criteria and will look at how this deal will create value," it said. However, most Wall Street analysts have expressed significant opposition to the proposed transaction. The biggest concern is that it would increase HP's exposure to the competitive and increasingly commoditised personal computer market at the expense of the company's profitable printing business. Public statements from ISS so far have not been very encouraging for HP, but the advisory group has stressed it has not yet undertaken a detailed analysis. The firm is expected to issue a final recommendation at some point early next year. With the shareholder vote expected in late February at the earliest, HP said it had time to convince shareholders that the deal would create a computer group with scope and scale needed to compete in a wide range of market segments. -- AND Hewlett-Packard undermined by solid foundation By Scott Morrison in San Francisco Published: December 9 2001 20:30 \| Last Updated: December 9 2001 20:46 Carly Fiorina, Hewlett-Packard chairman and chief executive, was dealt a slap in the face last week when the Packard Foundation announced its opposition to the company's $25bn bid for rival Compaq Computer. Only on Wednesday had she met the foundation board members and walked away quite hopeful that HP's largest shareholder would support the transaction. In a sign that investors believed the controversial deal was all but dead, HP's shares gained 6 per cent and Compaq shares fell 11 per cent in after-hours trading on Friday. The foundation, a charitable organisation that owns more than 10 per cent of HP's shares, is controlled by the daughters of late HP co- founder David Packard. With its decision, the three Packard sisters join their brother and the children of co-founder William Hewlett, who had earlier expressed their opposition to the deal. The Hewlett and Packard heirs have now effectively created a voting block against the transaction, and the weight of their opposition is considered to be much greater than the 18 per cent of shares they jointly control. Much has been made of the manner in which William Hewlett and Dave Packard founded their company in a garage in 1938. It was one of the first non-defence high-technology corporations to emerge in what is now Silicon Valley and the family names remain iconic in the region. HP employees, retail investors and possibly some institutional investors are likely to be influenced by the family members' strong opposition to the deal. Many industry observers suggest the families' opposition will prove too great a challenge for HP's management to overcome. Walter Hewlett, a current HP board member and the first heir to publicly oppose the deal, argues the deal would dilute HP's profitable printing business by increasing the company's exposure to the highly competitive and increasingly commoditised personal computer market. Many Wall Street analysts express similar concerns. The foundation on Friday said it understood the strategic considerations behind the proposal, "but after thorough study and analysis the board has preliminarily decided, on balance, that the best interests of the foundation would be better served by Hewlett-Packard not proceeding with the proposed transaction". What was behind the foundation's decision remains unclear as it was extremely vague as to why it would not support the transaction. Although one view is that the foundation hopes HP will try to exact better financial terms from Compaq, whose shareholders are seen to derive greater benefit from the deal, there is no evidence this was a primary consideration

To: hlpinout who wrote (94102)	12/10/2001 9:38:59 PM
From: Charles Tutt	Read Replies (1) \| Respond to of 97611

Maybe the shares went up because Carly decided she had better buy enough to swing the vote. <g> Charles Tutt (TM)

To: hlpinout who wrote (94102)	12/11/2001 6:31:59 AM
From: hlpinout	Read Replies (2) \| Respond to of 97611

From The Inquirer -- Compaq secrets to spill out in Dallas Marvel, Blades et al By the INQwell, 11/12/2001 07:56:38 BST SEATS ARE FILLING up for the Dallas Fort Worth Computer User Group meeting that'll be held at the Compaq Office at Lincoln Center, Dallas, TX, USA on Tuesday December 11. Notorious Belgian Hacker Cedric Zool will join Charlie Matco in the first public display of the Alpha 21364C EV7 microprocessor. Said processor was plucked from the very heart of a running Marvel system just ten days ago, and it is a sight to behold! Also disclosed will be a saucerful of secrets on things QuickBlade and Marvel-related. A splendid time is guaranteed for all! Rumour has it that mass quantities of food and drink will be on hand as well. To participate in this historic event, visit the DFWCUG cyberclubhouse at this spot. Be there or be rhomboid... µ And Capellas ready to throw in towel? Compaq going it alone By Mike Magee, 11/12/2001 09:46:31 BST BEATING OUR WAY THROUGH the thickets of popup ads that prevent easy access to the local Wall St rag, we notice there's a story which seems to indicate that CEO Mike "180" Capellas appears ready to throw in the towel. The paper says that he sent one of his famous brief memoranda to Q staff over the weekend acknowledging that the proposed tryst between his firm and Carly "Iron Lady" Fiorina, might just never happen. Unfortunately the Wall St Journal does not publish the memo, so we may never know whether Curly has donned sackcloth and ashes and is looking for swift redemption from his CEO position. The WSJ quotes Curly as saying while he still supports a merger, his responsibility is to maintain a pragmatic view of Compaq's business and a "clear focus" on the future. The cynical or the unkind might suggest that having apparently failed to deliver on his promise to turn Compaq round in 180 days, perhaps Mr Capellas needs a new pair of specs. Apparently, if Q stays on its own, it will concentrate on sales of packages of hardware, software and services. It's already given away its Alpha technology to Intel and Capellas is unlikely to lean over the garden fence and ask his neighbour Paul Otellini at Intel whether he can have his ball back now. Those famous steely eyes would be likely to turn in Capellas' direction and speak volumes without needing to exercise larynx or tongue. Just how Mr Capellas believes he can carry on as CEO of Compaq if the deal falls through defies belief. Surely shareholders will ask for his head. Uncertainty has muddied Compaq's business model now for months. There's another thing. Although on the face of it both Compaq and HP were "shoulder to shoulder" on the merger, we know, from conversations and also from documents we've seen that there were plotters within both firms that have actively briefed against the move. We've experienced this at first hand in London, so can only imagine the secret conversations that have gone on in different seats of power. µ