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 March 7, 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 COMMENTS ON STANDARD AND POOR'S DECISION
PALO ALTO, Calif., March 7, 2002 -- Hewlett-Packard Company (NYSE:HWP) today
said the company was disappointed with Standard and Poor's decision to lower its
corporate and senior debt ratings on HP. S&P said that irrespective of the
company's proposed merger with Compaq, HP's rating will be lower based on
challenges in the company's computer hardware business as well as potential
business and management disruption if the merger does not happen.
"HP continues to have one of the technology industry's strongest balance sheets
with total cash and short-term investments growing $4.3 billion during the last
12 months," said Larry Tomlinson, HP treasurer.
As of January 2002, HP's total cash and short-term investments totaled $7.1
billion compared to total short-term and long-term debt of $6.0 billion, and
cash generation from operations was strong, totaling $4.8 billion. During the
period, inventories were down $2.0 billion and accounts receivable were down
$1.3 billion.
"By merging with Compaq, our balance sheet will become even stronger, with a
combined company capable of generating $6 billion annually in free cash flow and
with zero net debt," said Tomlinson.
"HP's planned merger with Compaq addresses many of the issues raised by S&P by
significantly improving our market position and profitability in key segments of
the enterprise computing market and by creating a healthy PC business capable of
generating significant cash," said Tomlinson.
"Moreover, while S&P acknowledged integration challenges as part of their
decision, we believe Institutional Shareholder Services' recent report noting
that `half a million man-hours of work have thus far been devoted to integration
planning, which surely makes HP-Compaq one of the most exhaustively planned
combinations ever,' validates our efforts to ensure a successful integration."
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, cost savings, balance sheet strength 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 closing of the merger of HP and Compaq
or other planned acquisitions; 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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