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

To: PCSS who wrote (95152)	2/7/2002 12:25:22 PM
From: MeDroogies	Respond to of 97611

They should see if Ray Lane is available. He's not a financial guy, and frankly I don't think that's what's missing. Ray Lane is a great operational guy. He would tack 3 points onto CPQ/HWP stock just by showing his name on a door there.

To: PCSS who wrote (95152)	2/7/2002 4:58:43 PM
From: Night Writer	Read Replies (2) \| Respond to of 97611

UPDATE 1-HP rivals may benefit from Compaq deal--Jack Welch (clarifies that Welch quote in paragraph 3 was paraphrased, adds details of newspaper ad by opponents in paragraphs 20-23) NEW YORK, Feb 7 (Reuters) - Former GE Chairman Jack Welch told Hewlett-Packard <HWP.N> Chairwoman Carly Fiorina that he sees the potential for "chaos" surrounding HP's plan to acquire Compaq Computer Corp. <CPQ.N> that competitors could exploit. Welch said in a television interview on Thursday with Fiorina that support for the deal among HP's competitors could explain why European regulators had approved HP's proposed deal while rejecting General Motors Corp.'s <GE.N> $46 billion bid under Welch for Honeywell International Inc. <HON.N> last summer. Paraphrasing an argument made by Walter Hewlett, the main opponent of the HP-Compaq deal, Welch said: "Your competitors want this deal to go through. It will create chaos. They will clean both your clocks while you're doing all this." "That's the one argument that rang a bell with me," Welch told Fiorina during an interview on CNBC financial television, a unit of GE. HP's first offered to buy Compaq in September 2001. But the Hewlett and Packard families, which together own 18.5 percent of HP, are opposing the bid, which is now worth about $22.7 billion. On CNBC the legendary GE executive said he sympathized with Fiorina in her battle to win support for the deal, even as he challenged her on the threat competitors will pose should the deal go through. He joined CNBC journalists in questioning Fiorina, who is waging a battle with dissident shareholders, like the Hewlett and Packard families, to push through the deal. Opponents say the deal would saddle HP with a large, low-profit PC business and dilute the value of its printing franchise, while HP interests supporting the deal say it will create a high-end computer and services powerhouse. Fiorina responded to Welch by saying that this argument had been made by competitors since shortly after the Compaq deal was announced in September. But she said these boasts had quieted as HP rivals have faced financial pressures of their own. "When we announced this deal our competitors were very noisy about all the business they were going to take away from us," Fiorina said in the CNBC roundtable interview. She also took issue with Welch's assertion that Hewlett competitors had withheld from European regulators their objection to the deal in the hopes it would go through and enable them to exploit the opportunities it would create. Fiorina suggested that Hewlett-Packard's diplomatic skills had succeeded where GE's had failed. "We didn't politicize it and we didn't publicize it. We stuck to the substance of the case," she said of the European competition authority review. Behind the scenes European regulators turned aside complaints from HP rivals such as Germany's Fujitsu-Siemens. Less active in the regulatory debate were HP and Compaq's biggest rivals, including Dell Computer Corp. <DELL.O>, International Business Machines Corp. <IBM.N> and Sun Microsystems Inc. <SUNW.O>. But European Commission authorities noted there had been fewer complaints in the HP case, in contrast to the concerted campaign by GE rivals in the far more concentrated aircraft-engine market at issue in the Honeywell merger. "You're a lot smarter than I am and you were able to do it more effectively than I could," Welch allowed, even as he argued that a basic difference existed in the dynamics of the two regulatory battles. "My competitors killed me. They lived in Brussels," he said. Welch has been cited by Hewlett merger backers for his support of Fiorina and her board amid criticism of the deal raised by out spoken board member Walter Hewlett Mr. Hewlett, a son of one of the company's co-founders, first voted for the deal, then turned around and mounted a proxy battle to reject it. Six weeks ago, in an interview with Business Week, he decried the dissident board member's move as "unpardonable, it's a sin," and one that panders to employee nostalgia for a return to earlier days at the six-decade-old company. On Thursday, Walter Hewlett took out a full-page ad in the Wall Street Journal urging HP shareholders to vote "no" to the merger, saying that Compaq is "mired in manufacturing PCs -- low margin, money-losing commodity products." The advertisement advocated that HP focus on creating value and solving its own problems, not taking on Compaq's "bigger" problems. HP spokeswoman Rebeca Robboy said that Hewlett's ad misrepresents the company through selective omission. "He continues to either purposefully ignore or misunderstand the changing industry conditions and customer requirements that make this transaction the right one for HP and shareowners," she said. Hewlett-Packard has set March 19 as the date shareholders will vote to accept or reject the deal. ((-- Eric Auchard and Caroline Humer in New York and Peter Henderson in San Francisco, +1 646 223 6189, eric.auchard@reuters.com)) REUTERS * end of story *