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

To: Elwood P. Dowd who wrote (96576)	3/27/2002 9:55:47 PM
From: Captain Jack	Respond to of 97611

Mar 27, 2002 (The Dallas Morning News - Knight Ridder/Tribune News Service via COMTEX) -- Hewlett-Packard Co., watching investors gain confidence that its acquisition of Houston-based Compaq Computer Corp. will be approved, is now preparing the next phase of the merger - cutting jobs and implementing the new company's structure. H-P chief executive Carly Fiorina and Compaq Chief Executive Officer Michael Capellas started that process Wednesday with a letter to employees. In the next week, the letter said, the company will start detailing the rosters of each business division more specifically. And H-P will lay down some of the "guiding principles" it will use to select employees for jobs in the combined company. "We will try to do everything we can to minimize disruptions over the next several months," the letter said. "However, please keep in mind that we will be working to successfully implement what is arguably the most important merger in the history of the technology industry." Analysts called the letter the latest indication that Fiorina believes she's won shareholder approval for the merger. The company is awaiting an official certification on the very close proxy vote, which ended March 19. "It's in H-P's interest to be as accurate as possible in their communications about the merger," said Andrew Scott, a research associate at Needham & Co. "I'd be surprised if they'd speak without being 99 percent sure." Investors appear to be buying Fiorina's certainty. Analysts gauge Wall Street's confidence in the merger by comparing the price H-P is paying for Compaq shares against the actual price of the shares. When the merger appeared very much in doubt last November, Compaq shares were trading 30 percent lower than H-P's price for them. Now they're only about 5 percent lower, closing Wednesday down 25 cents at $10.60. H-P shares fell 31 cents to $17.77. While Fiorina's confidence grows, dissident H-P board member Walter Hewlett, who led the proxy fight against the merger, has shown signs of surrender. He told a conference of institutional investors Monday that he'd support the merger and try to stay on the board if the vote tally comes out in favor. "You've got H-P declaring victory, and Walter saying it was too close to call. If Walter had also claimed victory, that would be a different story," Scott said. "But he didn't."