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

To: Andreas who wrote (22465)	3/18/1998 6:25:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 97611

Compaq-DECdeal rumors seen misguided Reuters Story - March 18, 1998 17:54 %DPR %ENT %HOT %US %APL %ELI CPQ DEC V%REUTER P%RTR NEW YORK, March 18 (Reuters) - Rumors that the merger agreement between Compaq Computer Corp. and Digital Equipment Corp. was at risk of unraveling met with skepticism Wednesday on Wall Street, although options market activity suggested worries were mounting about the deal's prospects. Digital declined to comment on the rumors and a Compaq spokesman was not immediately available to comment. The two companies are currently working up a response to a request for information regarding their merger from the Federal Trade Commission. Sources familiar with the companies said that work is continuing as expected. Shares in Compaq have fallen steadily since the acquisition of Digital was first announced, raising questions among some traders about whether the cash-and-stock deal was imperiled. In the past week, Compaq executives have said the deal remains on track, notwithstanding signs of short-term business weakness at Digital and Compaq's highly-visible struggles to deal with excess inventory of personal computers at resellers. Also, analysts noted, there appeared to be little wiggle room in the deal that would allow either party to walk out. "There's nothing in the deal that allows (either company) to get out unless they mutually agree," said Gary Helmig, an analyst at SoundView Financial. In addition, questions about the future of some Digital products after an acquisition has already slowed some business for Digital this quarter as customers await a clear sign on plans for technologies like the Alpha processor, Helmig said. "I don't think Digital would want to walk away at this point," he said. Shares in Digital edged down 3/4 to 48-3/8 Wednesday on composite volume of about 3 million shares and Compaq climbed 3/16 to 23-13/16 on very heavy volume of nearly 29 million shares.