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Technology Stocks : Intel Strategy for Achieving Wealth and Off Topic -- Ignore unavailable to you. Want to Upgrade?

To: Sonny McWilliams who wrote (16694)	1/27/1998 8:03:00 AM
From: William Hunt	Read Replies (2) \| Respond to of 27012

SONNY --- WOULD LIKE TO DISCUSS CPQ TODAY WITH YOU -SINCE WE BOTH OWN IT --- too illogical on the other thread - have some ideas and thoughts about the combination --- thought this article might start it off . Compaq To Acquire Digital 11:41am EST 26-Jan-98 Compaq will acquire Digital. Compaq announced that it will acquire DEC for $9.6 billion. That translates to about $60 per share, $30 per share of cash plus .945 Compaq shares per DEC share. The share ratio is fixed. Compaq said that the synergies should offset the premium paid to DEC's $45 1/2 closing price (which had been quite strong the last few days). Compaq said the deal should be accretive within the year but not for the full year. The deal should close in 2Q; Compaq becomes the second largest IT company at pro forma revenue of $37 billion. The acquisition makes sense, certainly for DEC. DEC CEO Bob Palmer goes out with two good moves: (1) the Intel agreement that offloaded Alpha manufacturing to Intel and gave Alpha customers a path to Merced, which increased the likelihood of (2) selling out to Compaq at a 40% premium. Digital continues to fare poorly in our spending surveys. The company's mission of selling Internet- based solutions to enterprise customers does not sufficiently differentiate Digital. In addition, CEO Bob Palmer admitted on the conference call that DEC's brand has been tarnished. Consequently, DEC has trouble getting on the customer's short list, but when it does DEC wins a good percentage of the time. Being acquired by Compaq allows DEC to subvert its brand name (which will survive for now) and leverage its technology strengths. We figured Compaq might acquire either DEC or Unisys. Both have a large enterprise installed base, global presence, improving earnings situations, NT focus, and solid services offerings. Compaq did say it has lost enterprise deals to HP and IBM due to NT's scalability and reliability limitations. Digital UNIX is an excellent operating system that recently received Sequent's endorsement. Also, DEC's 23,000 services people puts Compaq on the enterprise map. Compaq also gets a $1.6 billion storage business that it can leverage since DEC was selling storage primarily with its own systems. Finally, the Alpha chip does give Compaq performance differentiation-DEC is about to announce screaming Alpha systems that are NT-only. Overlap areas include PC and PC servers, where DEC is not a top-tier player, and enterprise UNIX servers, which have been marketed against Tandem. It will take time to rationalize Tandem and DEC, but both vendors are moving to an Intel platform over time and plan to bring NT to the enterprise. Digital customers should react well. Once Digital customers are led through the acquisition rationale, we expect they will be positive on the resources and brand that Compaq brings. In fact, we expect that DEC users will react much like Tandem users have. We surveyed Tandem customers at last September's Tandem user group meeting. Here are a few of the replies. Replace "Digital" for "Tandem" and the results would probably be similar: BESTWISHES BILL

To: Sonny McWilliams who wrote (16694)	1/27/1998 9:03:00 AM
From: margaret tasset	Read Replies (1) \| Respond to of 27012

Good morning Sonny, That sounds good about getting some Compaq. Do you think that is better than Dell? Thank you for the links on the markets. I do hope that things continue today in the positive. That new 333 Mhz Intel processor should help things out a little bit, I would think. About that thing with the witness, you are right and I don't know what I was thinking of. This thing is getting like one of those soap operas. About the Superbowl, I think that the old spell is broken and that we are on the way up even though Green Bay lost. Beleve me, Frank's music is really going to blow your mind. It is very amazing. He is truly a very gifted person. I hope that all is well with you and have a good day. ************************GO INTEL FOREVER**************** Take care, Margaret :) :) :)