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

To: ELFRAM LYEW who wrote (19226)	3/4/1998 11:58:00 AM
From: MIKenn	Respond to of 97611

I've heard this argument before and don't think it is correct. CPQ's offer with acceptance was cash and CPQ stock, amount of which was the basis for the accepted offer: $30 in cash and .945 or .954 or .95 shares (whatever--it does not matter). From the date of the announcement, as long as the deal closes, DEC shareholders will always get $30 and .945 shares, no matter what the value of those shares. There is no benefit or detriment to CPQ based on fluctuation of the share price between acceptance and closing. Therefore, CPQ would have no motivation for intentionally depressing its stock price because of the pending DEC deal. What do you think? KQB

To: ELFRAM LYEW who wrote (19226)	3/4/1998 12:07:00 PM
From: Jim Patterson	Read Replies (1) \| Respond to of 97611

The stock that CPQ will issue to pay DEC holders has no impact on CPQ. The deal cost CPQ $30 + the shares. The shares don't cost CPQ anything. So any thought that this is some kind of ploy for CPQ so save $$ on the deal incorrect. The real threat is that if CPQ stock tanks, DEC could call off the deal or ask for a different mix of cash and shares in the interest of DEC shareholders. With that in mind, CPQ does not want it's stock to go down. However, the comments from the CFO would indicate that there might be problems on the horizon, think of them as maybe a class action hedge. He hinted of a problem before he may or may not announce a real problem. I hope that is clear. Jim