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

To: PCSS who wrote (94312)	12/18/2001 6:47:25 PM
From: Charles Tutt	Respond to of 97611

I think this frolic has driven a stake into the heart of CPQ's non-Wintel business from which they may never recover. It seems to me that in an attempt to bolster the chances for the merger, they've as much as said that HP-UX is better than their own Unix variant, and they've announced an EOL for the Alpha and significantly changed Tandem's roadmap. Their non-Wintel Enterprise customers must be wondering what's next. But that's JMHO. Charles Tutt (TM)

To: PCSS who wrote (94312)	12/18/2001 9:29:53 PM
From: hlpinout	Read Replies (3) \| Respond to of 97611

I am inclined to agree with you however Carly puts a nice spin on the merger. -- HP talks up Compaq Computer revenue potential By Scott Morrison in San Francisco Published: December 18 2001 21:28 \| Last Updated: December 18 2001 21:40 Carly Fiorina, Hewlett-Packard's chief executive, indicated on Tuesday that the company might be able to achieve greater revenue growth than first forecast following the company's proposed $21.9bn acquisition of Compaq Computer. In an interview with the Financial Times, Ms Fiorina also said the company expected to formally notify European Union regulators of the transaction by the end of this year. She said HP had held intensive talks with EU regulators, but the company was understood to have been waiting until it felt confident regulators would approve the deal within a 30-day period before formally filing. HP has repeatedly said regulatory considerations had prevented it from providing more details about its controversial bid for Compaq, which faces stiff opposition from key shareholders. Ms Fiorina on Tuesday said the company was considering three financial scenarios involving synergies and revenue targets following the merger. The first features $2.5bn in post-merger synergies that the company has already forecast. The second scenario involves more aggressive cost-cutting targets than currently expected. HP has already hinted it might be able to move beyond the current $2.5bn target, which the company calls a "high confidence number". The third scenario under review by the two companies' integration teams calls for more "revenue upside" than already forecast. "The teams are excited about case C," she said. But Ms Fiorina stopped short of stating that HP might increase post-merger revenue growth targets beyond current estimates. And she appeared to downplay suggestions HP might move to boost financial estimates in order to convince sceptical investors to back the deal. Bob Wayman, the company's chief financial officer, said that "case C" was most like the initial analysis prepared by HP and its advisers when the merger was first under consideration. However, the company scaled back its forecasts so that they would not appear unreasonable to analysts and investors. HP will early next month launch a road show aimed at convincing institutional shareholders to back the Compaq deal. The acquisition has been rejected by heirs of the company's two co-founders, forming a voting block with 18 per cent of shares against the deal. Ms Fiorina said the company would focus on selling the deal by revealing more about how it was managing the integration and demonstrating that it could execute in the short term. She pointed out that each company had another set of quarterly results to report before an HP shareholder vote, expected in late February at the earliest. HP said it would also move to provide more details about how it has analysed initial revenue losses. HP has said it expected initial revenue losses of 5 per cent in the wake of the merger but that it would seek to meet or exceed long-term market growth targets in a range of areas. HP has said the IT infrastructure market was expected to grow at 10 per cent annually and the access market, including PCs, at 5 per cent. HP also forecast the printing and imaging market would grow at 10 per cent and the service market by 15 per cent. Some analysts have said HP could suffer a revenue loss as great as 15 per cent following the merger. Ms Fiorina said such estimates were based on simplistic analyses.