Filed by Hewlett-Packard Company Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-6
Under the Securities Exchange Act of 1934
Subject Company: Compaq Computer Corporation
Commission File No.: 333-73454
This filing relates to a planned merger (the "Merger") between Hewlett-Packard
Company ("HP") and Compaq Computer Corporation ("Compaq") pursuant to the terms
of an Agreement and Plan of Reorganization, dated as of September 4, 2001 (the
"Merger Agreement"), by and among HP, Heloise Merger Corporation and Compaq. The
Merger Agreement is on file with the Securities and Exchange Commission as an
exhibit to the Current Report on Form 8-K, as amended, filed by Hewlett-Packard
Company on September 4, 2001, and is incorporated by reference into this filing.
On February 22, 2002, HP issued the following press release.
[LETTERHEAD OF HEWLETT-PACKARD COMPANY]
[HP INVENT LOGO]
Editorial Contacts:
Judy Radlinsky, HP
+1 650 857 5034
judy_radlinsky@hp.com
Rebeca Robboy, HP
+1 650 857 2064
rebeca_robboy@hp.com
HP STATEMENT ON WALTER HEWLETT'S USE OF DECEPTIVE CLAIMS
ABOUT VALUE CREATION TO MISLEAD HP SHAREOWNERS
PALO ALTO, Calif., Feb. 22, 2002 -- Hewlett-Packard Company (NYSE:HWP) today
issued the following statement in response to Walter Hewlett's continued use of
unsubstantiated claims to mislead HP shareowners about the value that would be
created by his so-called "plan/framework/guidelines/strategy."
Walter Hewlett has provided no credible support for his claim that his
"plan/framework/guidelines/strategy" will increase the value of HP by $14 to $17
per share, which is irresponsible at a time when shareowners should expect
unusually transparent and reliable disclosure from directors of public
companies.
Walter Hewlett says his "plan/framework/guidelines/strategy" will increase HP's
share price by approximately 75 percent to 90 percent from current levels within
18 months -- a prediction that defies common sense.
He invents $14 to $17 of so-called value by manipulating earnings projections
and inventing stock multiples. For example, his arbitrary assumption that HP can
double its operating margins in 18 months and achieve earnings per share (EPS)
levels 21 percent above First Call estimates defies credibility -- and accounts
for $12 per share of his so-called value creation.
He applies these invented earnings to an arbitrarily inflated price earnings
(P/E) multiple -- inexplicably 21 percent higher than what he calls "Current
P/E". This accounts for another $4 to $5 per share of his so-called value. When
you strip away these unsubstantiated earnings and multiple assumptions, Walter's
"plan/framework/guidelines/strategy" offers nothing new and no value creation.
In short, Walter Hewlett wants shareowners to believe he can virtually double
HP's stock price in 18 months through a status quo approach with no cost
savings. We don't understand how Walter Hewlett could make such baseless claims.
We can only assume that his financial analysis is the work of his "independent"
advisors who stand to gain $12 million if the merger is defeated and who have no
understanding of HP's business and have not consulted with HP managers to
substantiate their numbers.
By contrast, HP's careful and conservative financial analysis reflects the
combined judgments of both management teams and boards, and has been
stress-tested by more than 500,000 man-hours of integration planning. HP offers
a real plan based on real numbers that will deliver real value.
The issues before HP shareowners are far too important to be confused by these
deceptive tactics. HP will continue to address the merger on its merits, with
our positions supported by careful and conservative financial analysis. We ask
Walter Hewlett to do the same.
For more information on the merger, visit http://www.VotetheHPway.com.
ABOUT HP
Hewlett-Packard Company -- a leading global provider of computing and imaging
solutions and services -- is focused on making technology and its benefits
accessible to all. HP had total revenue of $45.2 billion in its 2001 fiscal
year. Information about HP and its products can be found on the World Wide Web
at http://www.hp.com.
# # #
This document contains forward-looking statements that involve risks,
uncertainties and assumptions. If any of these risks or uncertainties
materializes or any of these assumptions proves incorrect, the results of HP and
its consolidated subsidiaries could differ materially from those expressed or
implied by such forward-looking statements.
All statements other than statements of historical fact are statements that
could be deemed forward-looking statements, including any projections of
profitability, earnings,
revenues, synergies, accretion or other financial items; any statements of the
plans, strategies, and objectives of management for future operations, including
the execution of integration and restructuring plans and the anticipated timing
of filings, approvals and closings relating to the Merger or other planned
acquisitions; any statements concerning proposed new products, services,
developments or industry rankings; any statements regarding future economic
conditions or performance; any statements of belief and any statements of
assumptions underlying any of the foregoing.
The risks, uncertainties and assumptions referred to above include the ability
of HP to retain and motivate key employees; the timely development, production
and acceptance of products and services and their feature sets; the challenge of
managing asset levels, including inventory; the flow of products into
third-party distribution channels; the difficulty of keeping expense growth at
modest levels while increasing revenues; the challenges of integration and
restructuring associated with the Merger or other planned acquisitions and the
challenges of achieving anticipated synergies; the possibility that the Merger
or other planned acquisitions may not close or that HP, Compaq or other parties
to planned acquisitions may be required to modify some aspects of the
acquisition transactions in order to obtain regulatory approvals; the assumption
of maintaining revenues on a combined company basis following the close of the
Merger or other planned acquisitions; and other risks that are described from
time to time in HP's Securities and Exchange Commission reports, including but
not limited to HP's annual report on Form 10-K, as amended on January 30, 2002,
for the fiscal year ended October 31, 2001 and HP's registration statement on
Form S-4 filed on February 5, 2002.
HP assumes no obligation and does not intend to update these forward-looking
statements.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
On February 5, 2002, HP filed a registration statement with the SEC containing a
definitive joint proxy statement/prospectus regarding the Merger. Investors and
security holders of HP and Compaq are urged to read the definitive joint proxy
statement/prospectus filed with the SEC on February 5, 2002 and any other
relevant materials filed by HP or Compaq with the SEC because they contain, or
will contain, important information about HP, Compaq and the Merger. The
definitive joint proxy statement/prospectus and other relevant materials (when
they become available), and any other documents filed by HP or Compaq with the
SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents
filed with the SEC by HP by contacting HP Investor Relations, 3000 Hanover
Street, Palo Alto, California 94304, 650-857-1501. Investors and security
holders may obtain free copies of the documents filed with the SEC by Compaq by
contacting Compaq Investor Relations, P.O. Box 692000, Houston, Texas
77269-2000, 800-433-2391. Investors and security holders are urged to read the
definitive joint proxy statement/prospectus and the other relevant materials
(when they become available) before making any voting or investment decision
with respect to the Merger.
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