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

To: hlpinout who wrote (94185)	12/12/2001 6:55:30 AM
From: hlpinout	Read Replies (1) \| Respond to of 97611

HP's Fiorina says merger with Compaq still 'do-able' -------------------------------------------------------------------------------- LONDON (AFX) - Hewlett-Packard Co chief executive Carly Fiorina said she is still confident that the proposed merger with Compaq Computer Corp will succeed. In an interview with the Wall Street Journal, Fiorina said: "This is a do-able deal. We remain not only committed to it, but confident we can get it done." Fiorina said she plans to personally lobby the big institutional investors that will determine the fate of the merger. "We will be even more aggressive about our communication," she said. Fiorina argued that critics of the 25 bln usd merger have failed to see its logic. She said they have been focusing on the wrong thing -- the ailing personal-computer side of the two companies' operations. The real potential, she said, is in sales of big computers to major corporations and the growing amount of lucrative professional services these companies are contracting out. The combined company will be better equipped to compete with International Business Machines Corp, she maintained. Fiorina criticized the foundations of the founding Hewlett and Packard families that recently -- and unexpectedly, she said -- voted against the deal. She said the foundations have concerns of their own, such as stability and capital preservation, that may not align with the goals of other investors or with the strategy of HP itself. Regulatory approval of the deal could come relatively soon, she suggested, following an assiduous courtship of key authorities in the US and Europe. Once the companies have won the regulatory go-ahead, she said, she and other executives will be able to present a much more detailed version of their case. So far, HP has been holding back because regulators may force the combined company to jettison some lines of business. In the meantime, she said, they cannot talk up the potential of these operations. HP's chief financial officer, Bob Wayman, said in the same interview that the company remains confident it can get the shareholder votes it needs. After talking to institutional investors about how they will vote, "a few have said yes, most have said they are still deliberating," he said. "None have said they are voting against it." Fiorina said HP has essentially three choices for the PC business. First, the company could shut it down, leading to even more layoffs than the 15,000 that will result from the merger. Second, the company could spin out the PC business into a separate entity. Finally, Fiorina said: "We could fix it. We could put it together with a business that gives us scope, scale and distribution." That is what a Compaq acquisition does, she said. Wayman said the expectation is that the combined PC unit would contribute about 25 pct of sales, and account for about 10 pct of profits. jlw/jfr NNN