Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: hlpinout who wrote (96012)	3/12/2002 6:28:39 PM
From: hlpinout	Respond to of 97611

Really?? Heck of a scare tactic. -- Hewlett: Merger a loser at any price Says Compaq merger to put profit 28% below target By Mike Tarsala, CBS.MarketWatch.com Last Update: 6:10 PM ET March 12, 2002 PALO ALTO, Calif. (CBS.MW) Hewlett-Packard shouldn't attempt to buy Houston-based Compaq Computer at any price, merger opponent Walter Hewlett said Tuesday, citing the likelihood for lower profit caused by the deal's integration risks. Shareholders of H-P are over-paying for what Compaq is really worth, Hewlett reiterated in a conference call. He said the proposed merger has cut "billions and billions" from the value of H-P, and that if the combination is approved, the stock will lose even more. Wells Fargo to vote against H-P-Compaq deal Ex-H-P exec urges merger support H-P merger-transition team staffed by 900 workers H-P board members tout merger support More on the merger deal Sign up to receive FREE e-newsletters: Get the latest news 24 hours a day from our 100-person news team. "The integration risk is huge," Hewlett said. "The risk of taking on Dell head-on, a company which is executing well ... is extremely high. I would not advocate doing this deal at any price." H-P's board would never allow the 0.6235-share exchange ratio if the deal were to be recalculated today, Hewlett added. Hewlett said management at H-P and Compaq assumed the "perfect merger" when they made earnings assumptions for the combined company. If the merger is approved by shareholders in a vote on March 19, Hewlett assumes the company will earn $1.08 a share in 2003. H-P's management assumes the combined company will earn about 28 percent more, or $1.51 a share. He said that his plan, which emphasized the company's profit-rich imaging and printing business, would result in substantially higher earnings of $1.53 a share. As a result, H-P could be a $36 stock by the end of 2003, Hewlett said, while he says the stock would be at 20 a share under the merger plan. H-P and Compaq cannot succeed with a merger strategy to "out-Dell" Dell Computer in the personal computer business, and to "out-IBM" the services strategy of Big Blue. "Make no mistake - that is what the merger will require," Hewlett told analysts and reporters. In particular, Hewlett said the combined H-P will not have the cost advantage or the direct sales channels to keep prices low and steal market share from industry leader Dell. "We add no value to low-cost commodity computing," Hewlett said. H-P should not chase profitless revenue." ... "This is a terrible business, where the profits go to Intel, Microsoft and Dell." Adding H-P and Compaq's personal computer businesses together won't necessarily be more profitable due to its size, Hewlett said. If that were the case, he said Compaq, which has a larger PC business than H-P, would be the more profitable of the two companies Hewlett also warned that the merger could result in a battle for power at the combined company. In other mergers, he said the power struggle is subtle at first, but eventually becomes more blatant. He said there is no reason to think it will be different at the merged H-P/Compaq. "Who will win -- Texas or Silicon Valley?" Hewlett asked. Shares of H-P (HWP: news, chart, profile) lost 42 cents to close at $20.56, while Compaq (CPQ: news, chart, profile) shares lost 15 cents to close at $11.12. Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com.

To: hlpinout who wrote (96012)	3/12/2002 6:32:25 PM
From: hlpinout	Respond to of 97611

Brutal. Man, what kind of company is HWP going to be either way??? Just the thought of Carly and WW staying with the company if the merger went through would cause me to vote against it. I am begining to think Compaq will recover long before HWP if the merger does not happen. Whatta mess. -- Hewlett-Packard Top Management Will Stay, Says Walter Hewlett By Peter J. Brennan Palo Alto, California, March 12 (Bloomberg) -- Hewlett- Packard Co.'s management team will keep their jobs, except for Chief Executive Carly Fiorina, if the $22.2 billion acquisition of Compaq Computer Corp. isn't approved, said dissident director Walter Hewlett. ``All of the senior team will stay; they are all valuable,'' Walter Hewlett said during a conference call with investors and analysts. ``If the merger is defeated, I don't think (Fiorina) will have the credibility to lead this company.'' Some investors are worried that defeat of the acquisition, scheduled for a shareholder vote on March 19, will result in senior executives and board directors leaving the world's second- largest computer maker. Hewlett-Packard said in a press release today that Walter Hewlett cannot give assurances that board or management members won't leave if the deal isn't completed. Walter Hewlett, son of a co-founder of the Palo Alto, California-based company and leader of the proxy battle against the deal, said senior management is just following Fiorina's wish by supporting this acquisition. He said a replacement for Fiorina could be found within three to four months. ``This time around, we don't want someone learning on the job,'' he said. Hewlett-Packard directors Phil Condit and Sam Ginn yesterday said they haven't decided whether to stay on the company's board if investors vote down the planned purchase of rival Compaq Computer. Walter Hewlett said the board directors ``will act responsibly.'' ``The merger will be infinitely more disruptive than a simple change of a CEO,'' Hewlett said. Shares of Hewlett-Packard fell 42 cents to $20.56 today. Compaq, based in Houston, Texas, fell 15 cents to $11.12. International Business Machines Corp. is the world's biggest computer maker.