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

To: PCSS who wrote (95874)	3/8/2002 4:05:23 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

The FAT PIG is beginning to stir about in the barn??? El

To: PCSS who wrote (95874)	3/8/2002 4:10:47 PM
From: Night Writer	Read Replies (2) \| Respond to of 97611

Classic Arb action would have driven the HWP price down. HWP is also going up. This is strange, but I'm not going to complain.<G> NW

To: PCSS who wrote (95874)	3/9/2002 10:12:31 AM
From: Elwood P. Dowd	Respond to of 97611

CalPERS to vote against H-P/Compaq By Mike Tarsala, CBS.MarketWatch.com Last Update: 7:36 PM ET March 8, 2002 SACRAMENTO, Calif. (CBS.MW) -- Adding to the list of dissenters, the California Public Employees' Retirement System said Friday it would vote its 7.6 million shares against Hewlett-Packard's acquisition of Compaq Computer. The influential pension fund is the first of H-P's large investors to go against the recommendation of proxy-advisement company Institutional Shareholder Services, the Rockville-Md.-based firm that endorsed the deal earlier this week. The fund is an ISS client. See full story. CalPERS, as the pension fund is known, said a high premium being paid for Compaq is part of the reason it will vote the 0.4-percent H-P stake it owns against the deal. "They're paying 4 to 5 times Compaq's value," said Pat Macht, a CalPERS spokeswoman. "This price is unprecedented in the technology industry -- more than twice the amount on a multiple of earnings basis -- based on the price other hardware systems acquirers have paid for similar companies." With the addition of CalPERS, about 21 percent of H-P's shareholders, including shares owned by the Hewlett and Packard families and their trusts, have said they plan to vote shares against the combination backed by H-P and Compaq's management teams. "We're disappointed in the decision and believe it fails to account for the changes underway in the technology industry and the risks of standing still," H-P's management said in a statement. "In the technology industry, the future is a better investment than the past." Echoing the plan forwarded by dissident H-P board member Walter Hewlett, CalPERS said management should abandon the merger and focus on building a strong imaging and printing organization, while strengthening its storage, services and high-end consulting businesses. "We're delighted that CalPERS, after a thorough analysis, has decided to vote its shares against the transaction," Hewlett said. "Every week, more and more investors publicly come out against the merger." CalPERS made clear that its doesn't want its decision to be viewed as a referendum on Carly Fiorina, H-P's chief executive, or the rest of management. The H-P combination has negative financial consequences, significant integration risks and will tear H-P away from its core strengths, according to CalPERS. There's also a possibility for significantly higher costs than management at H-P and Compaq had spelled out for investors in regulatory filings, Macht said. "We don't think competitors would stand by quietly and let Compaq and Hewlett integrate," she added. CalPERS decided to announce its voting intention as part of its normal disclosure practice - not in an effort to sway proxy votes, according to Macht. She said the fund normally makes it share votes known in a proxy fight about 10 days before a shareholder meeting. Shares of H-P (HWP: news, chart, profile) rose 59 cents to close at $20.59 on the Big Board, while Compaq (CPQ: news, chart, profile) shares gained 65 cents to close at $11.80. Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com.